AGREEMENT AND PLAN OF MERGER Dated as of August 31, 2006 Among Asahi Tec Corporation Argon Acquisition Corp. And Metaldyne Corporation
Exhibit
2.1
|
AGREEMENT
AND PLAN OF MERGER
Dated
as of August 31, 2006
Among
Asahi
Tec Corporation
Argon
Acquisition Corp.
And
Metaldyne
Corporation
|
TABLE
OF
CONTENTS
Page
ARTICLE
I
The
Merger
|
SECTION
1.01. The Merger
|
2
|
|
SECTION
1.02. Closing
|
3
|
|
SECTION
1.03. Effective Time
|
3
|
|
SECTION
1.04. Effects of the Merger
|
3
|
|
SECTION
1.05. Certificate of Incorporation and By-laws
|
3
|
|
SECTION
1.06. Directors
|
3
|
|
SECTION
1.07. Officers
|
3
|
ARTICLE
II
Effect
of
the Merger on the Capital Stock of the Constituent Corporations; Exchange of
Certificates
|
SECTION
2.01. Effect on Capital Stock
|
4
|
|
SECTION
2.02. Exchange of Certificates
|
6
|
ARTICLE
III
Representations
and Warranties of the Company
|
SECTION
3.01. Organization, Standing and Power
|
9
|
|
SECTION
3.02. Company Subsidiaries; Equity Interests
|
9
|
|
SECTION
3.03. Capital Structure
|
10
|
|
SECTION
3.04. Authority; Execution and Delivery; Enforceability
|
11
|
|
SECTION
3.05. No Conflicts; Consents
|
12
|
|
SECTION
3.06. SEC Documents; Undisclosed Liabilities
|
14
|
|
SECTION
3.07. Information Supplied
|
15
|
|
SECTION
3.08. Absence of Certain Changes or Events
|
15
|
|
SECTION
3.09. Taxes
|
17
|
|
SECTION
3.10. Absence of Changes in Benefit Plans
|
19
|
|
SECTION
3.11. ERISA Compliance; Excess Parachute Payments
|
20
|
|
SECTION
3.12. Litigation
|
24
|
|
SECTION
3.13. Compliance with Applicable Laws
|
24
|
|
SECTION
3.14. Environmental Matters
|
25
|
|
SECTION
3.15. Intellectual Property
|
27
|
|
SECTION
3.16. Contracts; Debt Instruments
|
27
|
|
SECTION
3.17. Title to Real Properties
|
28
|
ii
|
SECTION
3.18. TM Distribution
|
28
|
|
SECTION
3.19. Customers and Suppliers
|
29
|
|
SECTION
3.20. Brokers; Schedule of Fees and Expenses
|
29
|
|
SECTION
3.21. Opinion of Financial Advisor
|
30
|
ARTICLE
IV
Representations
and Warranties of Parent and Acquisition Sub
|
SECTION
4.01. Organization, Standing and Power
|
30
|
|
SECTION
4.02. Acquisition Sub
|
30
|
|
SECTION
4.03. Authority; Execution and Delivery; Enforceability
|
30
|
|
SECTION
4.04. No Conflicts; Consents
|
31
|
|
SECTION
4.05. Information Supplied
|
32
|
|
SECTION
4.06. Brokers
|
32
|
|
SECTION
4.07. Financing
|
32
|
|
SECTION
4.08. Section 203
|
33
|
ARTICLE
V
Covenants
Relating to Conduct of Business
|
SECTION
5.01. Conduct of Business
|
33
|
|
SECTION
5.02. No Solicitation
|
37
|
ARTICLE
VI
Additional
Agreements
|
SECTION
6.01. Preparation of Information Statement; Action by Written
Consent
|
39
|
|
SECTION
6.02. Access to Information; Confidentiality
|
40
|
|
SECTION
6.03. Commercially Reasonable Efforts; Notification
|
40
|
|
SECTION
6.04. Stock Options and Restricted Stock Units
|
42
|
|
SECTION
6.05. Benefit Plans
|
43
|
|
SECTION
6.06. Indemnification
|
44
|
|
SECTION
6.07. Fees and Expenses
|
45
|
|
SECTION
6.08. Public Announcements
|
45
|
|
SECTION
6.09. Transfer Taxes
|
46
|
|
SECTION
6.10. Stockholder Litigation
|
46
|
|
SECTION
6.11. Financing; Consent Solicitations
|
46
|
iii
ARTICLE
VII
Conditions
Precedent
|
SECTION
7.01. Conditions to Each Party’s Obligation To Effect The
Merger
|
48
|
|
SECTION
7.02. Conditions to Obligations of Parent and Acquisition
Sub
|
49
|
|
SECTION
7.03. Condition to Obligation of the Company
|
51
|
ARTICLE
VIII
Termination,
Amendment and Waiver
|
SECTION
8.01. Termination
|
51
|
|
SECTION
8.02. Effect of Termination
|
53
|
|
SECTION
8.03. Amendment
|
53
|
|
SECTION
8.04. Extension; Waiver
|
53
|
|
SECTION
8.05. Procedure for Termination, Amendment, Extension or
Waiver
|
53
|
ARTICLE
IX
General
Provisions
|
SECTION
9.01. Nonsurvival of Representations and Warranties
|
54
|
|
SECTION
9.02. Notices
|
54
|
|
SECTION
9.03. Definitions
|
55
|
|
SECTION
9.04. Interpretation
|
57
|
|
SECTION
9.05. Severability
|
57
|
|
SECTION
9.06. Counterparts
|
57
|
|
SECTION
9.07. Entire Agreement; No Third-Party Beneficiaries
|
57
|
|
SECTION
9.08. Governing Law
|
57
|
|
SECTION
9.09. Assignment
|
57
|
|
SECTION
9.10. Enforcement
|
58
|
|
SECTION
9.11. Tax Treatment
|
58
|
iv
AGREEMENT
AND PLAN OF MERGER dated as of August 31, 2006, among Asahi Tec
Corporation, a Japanese corporation (“Parent”),
Argon
Acquisition Corp., a Delaware corporation (“Acquisition
Sub”)
and a
wholly owned subsidiary of Parent, and Metaldyne Corporation, a Delaware
corporation (the “Company”).
WHEREAS
the respective Boards of Directors of Parent, Acquisition Sub and the Company
have approved the merger (the “Merger”)
of
Acquisition Sub into the Company, on the terms and subject to the conditions
set
forth in this Agreement whereby each issued share of common stock, par value
$1.00 per share, of the Company (the “Company
Common Stock”)
and
each issued and outstanding share of Company Preferred Stock (as defined in
Section 3.03) not owned by Parent, Acquisition Sub or the Company shall be
converted into the right to receive cash;
WHEREAS
Parent has entered into a commitment to refinance certain existing indebtedness
of the Company and to pay related fees and expenses;
WHEREAS
simultaneously with the execution and delivery of this Agreement and as a
condition to Parent’s willingness to enter into this Agreement, Parent and
certain stockholders of the Company listed on Schedule 1.1 hereto (the
“Principal
Company Stockholders”)
have
entered into a stock purchase agreement dated as of the date of this Agreement
(the “Parent
Stock Purchase Agreement”),
whereby the Principal Company Stockholders will acquire shares of common stock
of the Parent using the Merger Consideration received by such Principal Company
Stockholders as consideration for such shares (the “Parent
Stock Acquisition”);
WHEREAS
simultaneously with the execution and delivery of this Agreement and as a
condition to Parent’s willingness to enter into this Agreement, Parent, the
Company and each of the holders of (i) the Series A Company Preferred
Stock, (ii) the Series A-1 Company Preferred Stock, and (iii) the
Series B Company Preferred Stock (each as defined in Section 3.03)
each have entered into an agreement (each, an “Other
Stock Purchase Agreement”)
dated
as of the date of this Agreement whereby holders of the Company Preferred Stock
(such holders, the “Company
Preferred Stockholders”)
shall
acquire for cash shares of convertible preferred stock of Parent or common
stock
of Parent using the Merger Consideration received by such holders as
consideration for such convertible preferred stock (the “Other
Stock Acquisition”);
WHEREAS
simultaneously with the execution and delivery of this Agreement, each of the
persons identified on Schedule 1.2
hereto
has executed and delivered an Employment Agreement between such person and
the
Company, which Employment Agreements shall be effective as of the Effective
Time
and result in a
termination
at the Effective Time of such person’s existing employment agreement with the
Company;
WHEREAS
as
soon as reasonably practicable following the execution and delivery of this
Agreement, the Company will commence (a) a tender offer with an associated
consent solicitation with respect to its (i) 11% Senior Subordinated Notes
due
June 15, 2012 (the “11%
Senior Subordinated Notes”),
issued
pursuant to an indenture dated June 20, 2002 (the “11%
Senior Subordinated Notes Indenture”),
and
(ii) 10%
Senior
Subordinated Notes due January 15, 2014
(the
“10%
Senior Subordinated Notes”
and,
together with the 11% Senior Subordinated Notes, the “Tender
Notes”),
issued
pursuant to an indenture dated December 31, 2003 (the “10%
Senior Subordinated Notes Indenture”),
and
(b) consent solicitations with respect to its 10% Senior Notes due 2013
(the “10%
Senior Notes”
and,
together with the 11% Senior Subordinated Notes and the 10% Senior Subordinated
Notes, the “Notes”),
issued
pursuant to an indenture dated October 27, 2003 (the “10%
Senior Notes Indenture”
and,
together with the 11% Senior Subordinated Notes Indenture and the 10% Senior
Subordinated Notes Indenture, the “Notes
Indentures”),
in the
case of each of (a) and (b) as described in Schedule 6.11(b) (collectively,
the “Consent
Solicitations”);
and
WHEREAS
Parent, Acquisition Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also
to
prescribe various conditions to the Merger.
NOW,
THEREFORE, the parties hereto agree as follows:
ARTICLE
I
The
Merger
SECTION
1.01. The
Merger.
On the
terms and subject to the conditions set forth in this Agreement, and in
accordance with the Delaware General Corporation Law (the “DGCL”),
Acquisition Sub shall be merged with and into the Company at the Effective
Time
(as defined in Section 1.03). At the Effective Time, the separate corporate
existence of Acquisition Sub shall cease and the Company shall continue as
the
surviving corporation (the “Surviving
Corporation”).
The
Merger, the payment of cash in connection with the Merger and the other
transactions contemplated by this Agreement and the other Transaction
Agreements, other than the TM Distribution, are referred to in this Agreement
collectively as the “Transactions”.
At the
election of Parent, any direct wholly owned subsidiary of Parent with no or
nominal assets and no liabilities may be substituted for Acquisition Sub as
a
constituent corporation in the Merger. In such event, the parties shall execute
an appropriate amendment to this Agreement in order to reflect the
foregoing.
2
SECTION
1.02. Closing.
The
closing (the “Closing”)
of the
Merger shall take place at the offices of Cravath, Swaine &
▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at a
mutually agreeable time during Tokyo business hours on the second business
day
following the satisfaction (or, to the extent permitted by Law as defined in
Section 3.05, waiver by all parties) of the conditions set forth in
Section 7.01, or, if on such day any condition set forth in
Section 7.02 or 7.03 has not been satisfied (or, to the extent permitted by
Law, waived by the party or parties entitled to the benefits thereof), as soon
as practicable after all the conditions set forth in Article VII have been
satisfied (or, to the extent permitted by Law, waived by the parties entitled
to
the benefits thereof), or at such other place, time and date as shall be agreed
in writing between Parent and the Company. The date on which the Closing occurs
is referred to in this Agreement as the “Closing
Date”.
SECTION
1.03. Effective
Time.
Prior to
the Closing, Parent and the Company shall prepare, and on the Closing Date
or as
soon as practicable thereafter Parent and the Company shall file with the
Secretary of State of the State of Delaware, a certificate of merger or other
appropriate documents (in any such case, the “Certificate
of Merger”)
executed in accordance with the relevant provisions of the DGCL and shall make
all other filings or recordings required under the DGCL. The Merger shall become
effective at such time as the Certificate of Merger is duly filed with such
Secretary of State, or at such other time as Parent and the Company shall agree
and specify in the Certificate of Merger (the time the Merger becomes effective
being the “Effective
Time”).
SECTION
1.04. Effects
of the Merger.
The
Merger shall have the effects set forth in Section 259 of the
DGCL.
SECTION
1.05. Certificate
of Incorporation and By-laws. (a)
The
Certificate of Incorporation of the Surviving Corporation shall be amended
at
the Effective Time to read in the form of Exhibit A, and, as so amended,
such Certificate of Incorporation shall be the Certificate of Incorporation
of
the Surviving Corporation until thereafter changed or amended as provided
therein or by applicable Law.
(b)
The
By-laws of Acquisition Sub as in effect immediately prior to the Effective
Time
and as heretofore provided to the Company shall be the By-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable Law.
SECTION
1.06. Directors.
The
directors of Acquisition Sub immediately prior to the Effective Time shall
be
the directors of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected
and
qualified, as the case may be.
SECTION
1.07. Officers.
The
officers of the Company immediately prior to the Effective Time shall be the
officers of the Surviving Corporation, until the
3
earlier
of
their resignation or removal or until their respective successors are duly
elected or appointed and qualified, as the case may be.
ARTICLE
II
Effect
of
the
Merger on the Capital Stock of the
Constituent
Corporations; Exchange of Certificates
SECTION
2.01. Effect
on Capital Stock.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
the holder of any shares of Company Common Stock or any shares of common stock
of Acquisition Sub:
(a)
Capital
Stock of Acquisition Sub.
Each
issued and outstanding share of common stock of Acquisition Sub shall be
converted into and become one fully paid and nonassessable share of common
stock, par value $0.01 per share, of the Surviving Corporation.
(b)
Cancelation
of Treasury Stock and Parent- Owned Stock.
Each
share of Company Common Stock that is owned by the Company, Parent, Acquisition
Sub or any subsidiary thereof shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and no
consideration shall be delivered or deliverable in exchange
therefor.
(c)
Conversion
of Company Common Stock and Company Preferred Stock. (i) Subject
to Sections 2.01(b), 2.01(c)(ii) and 2.01(d), (1) each issued share of
Company Common Stock owned by a Principal Company Stockholder shall be converted
into the right to receive $2.1833 in cash (such amount per share of Company
Common Stock, the “PCS Common
Merger Consideration”),
(2) each other issued share of Company Common Stock shall be converted into
the right to receive cash in an amount equal to the greater of (A) $2.40
and (B) the product of (x) the Common Price Ratio (as defined below)
and (y) $2.40 (such greater amount per share of Company Common Stock, the
“Common
Merger Consideration”),
(3) each issued share of Series A Company Preferred Stock (as defined
below) shall be converted into the right to receive in cash the quotient of
(x) $44,893,310 divided by (y) the number of such issued shares,
(4) each issued share of Series A-1 Company Preferred Stock (as
defined below) shall be converted into the right to receive in cash the quotient
of $53,106,702 divided by (y) the number of such issued shares and
(5) each issued share of Series B Company Preferred Stock (as defined
below) shall be converted into the right to receive in cash the quotient of
(x) $23,893,135 divided by (y) the number of such issued
shares.
(ii) In
the
event that any cash payment will be due following the Effective Time from the
Company to a holder of a Company Stock Option pursuant to Section 6.04
(after taking into account any such holder that
4
irrevocably
waives his or her right to any such payment), the PCS Common Merger
Consideration and the Common Merger Consideration shall be appropriately
adjusted (pro rata, on a per share basis) so that the aggregate amount of the
Merger Consideration and such payment or payments following such adjustment
equals the amount of the Merger Consideration (excluding any such payment or
payments) prior to such adjustment.
(iii) For
purposes of this Agreement: (1) “Common
Price Ratio”
means
a
fraction equal the quotient of (x) the Closing Common Price divided by
(y) the Signing Common Price, (2) “Signing
Common Price”
means
$1.9282 and (3) “Closing
Common Price”
means
the average of the closing prices in Japanese yen of a share of Common Stock
of
the Parent on the Tokyo Stock Exchange (“TSE”)
for the
thirty trading day period ending on the second business day prior to the Closing
Date, converted into U.S. dollars at the 4:00 p.m., New York time, exchange
rate of Japanese yen to U.S. dollars published by the Wall Street Journal (New
York City edition) on the second business day immediately prior to the Closing
Date.
(iv) The
cash
payable upon the conversion of shares of Company Common Stock and Company
Preferred Stock pursuant to this Section 2.01(c) is referred to
collectively as the “Merger
Consideration”.
As of
the Effective Time, all such shares of Company Common Stock and Company
Preferred Stock shall no longer be outstanding and shall automatically be
canceled and shall cease to exist, and each holder of a certificate representing
any such shares of Company Common Stock or Company Preferred Stock shall cease
to have any rights with respect thereto, except the right to receive the
applicable Merger Consideration, without interest, upon surrender of such
certificate in accordance with this Section 2.01 and
Section 2.02.
(d)
Appraisal
Rights.
Notwithstanding anything in this Agreement to the contrary, shares
(“Appraisal
Shares”)
of
Company Common Stock and Company Preferred Stock that are outstanding
immediately prior to the Effective Time and that are held by any person who
is
entitled to demand and properly demands appraisal of such Appraisal Shares
pursuant to, and who complies in all respects with, Section 262 of the DGCL
(“Section 262”)
shall
not be converted into Merger Consideration as provided in Section 2.01(c),
but rather the holders of Appraisal Shares shall be entitled to payment of
the
fair value of such Appraisal Shares in accordance with Section 262;
provided,
however,
that if
any such holder shall fail to perfect or otherwise shall waive, withdraw or
lose
the right to appraisal under Section 262, then the right of such holder to
be paid the fair value of such holder’s Appraisal Shares shall cease and such
Appraisal Shares shall be deemed to have been converted as of the Effective
Time
into, and to have become exchangeable solely for the right to receive, Merger
Consideration as provided in Section 2.01(c). The Company shall serve
prompt notice to Parent of any demands received by the Company for appraisal
of
any shares of Company Common Stock or
5
Company
Preferred Stock, and Parent shall have the right to participate in and direct
all negotiations and proceedings with respect to such demands. Prior to the
Effective Time, the Company shall not, without the prior written consent of
Parent, make any payment with respect to, or settle or offer to settle, any
such
demands, or agree to do any of the foregoing.
SECTION
2.02. Exchange
of Certificates. (a)
Paying
Agent.
Prior to
the Effective Time, Parent shall, with the Company’s consent not to be
unreasonably withheld, select a bank or trust company to act as paying agent
for
the payment of the Merger Consideration to the Principal Company Stockholders
and to the holders of the Company Preferred Stock (the “PCS
Paying Agent”)
and a
second bank or trust company to act as paying agent for the payment of the
Merger Consideration to the other common stockholders of the Company (the
“Other
Paying Agent”
and,
together with the PCS Paying Agent, the “Paying
Agents”),
in
each case upon surrender of certificates representing Company Common Stock
or
Company Preferred Stock. Parent, on behalf of the Surviving Corporation, shall
provide to the PCS Paying Agent at the Effective Time in immediately available
funds all the cash necessary to pay for the shares of Company Common Stock
of
the Principal Company Stockholders and the shares of the Company Preferred
Stock
of the holders thereof and shall provide to the Other Paying Agent at the
Effective Time in immediately available funds all the cash necessary to pay
for
the shares of Company Common Stock of the other stockholders of the Company,
in
each case such shares of Company Common Stock or Company Preferred Stock having
been converted into the right to receive cash pursuant to Section 2.01(c)
(such cash being hereinafter referred to as the “Exchange
Fund”).
(b)
Exchange
Procedure.
With
respect to the Company Common Stock of the Principal Company Stockholders and
the Company Preferred Stock of the holders thereof, not less than
two business days prior to the Closing Date the PCS Paying Agent shall mail
or otherwise deliver to each Principal Company Stockholder or holder of Company
Preferred Stock that is a holder of record of certificate or certificates (the
“Certificates”)
that
immediately prior to the Effective Time will represent outstanding shares of
Company Common Stock or Company Preferred Stock whose shares will be converted
into the right to receive the Merger Consideration pursuant to
Section 2.01, (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 PCS Paying Agent and shall
be in such form and have such other provisions as Parent may reasonably specify)
and (ii) instructions for use in effecting the surrender of the
Certificates at the Effective Time in exchange for Merger Consideration. With
respect to the other Company Common Stock, as soon as reasonably practicable
after the Effective Time, the Other Paying Agent shall mail to each other holder
of record of a Certificate or Certificates that immediately prior to the
Effective Time represented outstanding shares of Company Common Stock whose
shares were converted into the right to receive Merger Consideration pursuant
to
Section 2.01, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall
6
pass,
only
upon delivery of the Certificates to the Paying Agent and shall be in such
form
and have such other provisions as Parent may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for Merger Consideration. Upon surrender of a Certificate for
cancelation to the applicable Paying Agent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor the amount of cash into which the shares of
Company Common Stock or Company Preferred Stock theretofore represented by
such
Certificate shall have been converted pursuant to Section 2.01, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Company Common Stock that is not registered in the
transfer records of the Company, payment may be made to a person other than
the
person in whose name the Certificate so surrendered is registered, if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of Parent that
such
tax 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 upon such surrender the
amount of cash, without interest, into which the shares of Company Common Stock
or Company Preferred Stock theretofore represented by such Certificate have
been
converted pursuant to Section 2.01. No interest shall be paid or accrue on
the cash payable upon surrender of any Certificate.
(c)
No
Further Ownership Rights in Company Common Stock.
The
Merger Consideration paid in accordance with the terms of this Article II
upon conversion of any shares of Company Common Stock or Company Preferred
Stock
shall be deemed to have been paid in full satisfaction of all rights pertaining
to such shares of Company Common Stock and Company Preferred Stock and after
the
Effective Time there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of shares of Company Common Stock
or
Company Preferred Stock that were outstanding immediately prior to the Effective
Time. If, after the Effective Time, any certificates formerly representing
shares of Company Common Stock are presented to the Surviving Corporation or
a
Paying Agent for any reason, they shall be canceled and exchanged as provided
in
this Article II.
(d)
Termination
of Exchange Fund.
Any
portion of the Exchange Fund that remains undistributed to the holders of
Company Common Stock or Company Preferred Stock for twelve months after the
Effective Time shall be delivered to Parent, upon demand, and any holder of
Company Common Stock who has not theretofore complied with this Article II
shall thereafter look only to Parent and the Surviving Corporation for payment
of its claim for Merger Consideration.
(e)
No
Liability.
None of
Parent, Acquisition Sub, the Company or the Paying Agents shall be liable to
any
person in respect of any cash from the Exchange
7
Fund
properly delivered to a public official pursuant to any applicable abandoned
property, escheat or similar Law. If any Certificate has not been surrendered
prior to five years after the Effective Time (or immediately prior to such
earlier date on which Merger Consideration in respect of such Certificate would
otherwise escheat to or become the property of any Governmental Entity (as
defined in Section 3.05), any such shares, cash, dividends or distributions
in respect of such Certificate shall, to the extent permitted by applicable
Law,
become the property of the Surviving Corporation, free and clear of all claims
or interest of any person previously entitled thereto.
(f)
Investment
of Exchange Fund.
The Other
Paying Agent shall invest any cash included in the Exchange Fund held by it,
as
directed by Parent, in (i) direct obligations of the United States of
America, (ii) obligations for which the full faith and credit of the United
States of America is pledged to provide for the payment of all principal and
interest or (iii) commercial paper obligations receiving the highest rating
from either ▇▇▇▇▇’▇ Investor Services, Inc. or Standard & Poor’s, a
division of The McGraw Hill Companies, or a combination thereof; provided
that, in
any such case, no such instrument shall have a maturity exceeding three months
from the date of the investment therein. Any interest and other income resulting
from such investments shall be paid to Parent.
(g)
Withholding
Rights.
Parent
and the Surviving Corporation shall be entitled to deduct and withhold from
the
consideration otherwise payable to any holder of Company Common Stock or Company
Preferred Stock pursuant to this Agreement such amounts as may be required
to be
deducted and withheld with respect to the making of such payment under the
Code
(as defined in Section 3.09), or under any provision of Federal, state,
local or foreign tax Law. To the extent that amounts are so withheld and paid
over to the appropriate taxing authority by Parent, such withheld amounts shall
be treated for all purposes of this Agreement as having been paid to the holders
of the shares of Company Common Stock or Company Preferred Stock in respect
of
which such deduction and withholding was made by Parent.
(h)
Lost
Certificates.
If any
Certificate shall have been lost, stolen, defaced or destroyed, upon the making
of an affidavit of that fact by the person claiming such Certificate to be
lost,
stolen, defaced or destroyed and, if reasonably required by the Surviving
Corporation, the posting by such person of a bond in such reasonable amount
as
the Surviving Corporation may direct as indemnity against any claim that may
be
made against it with respect to such Certificate, the applicable Paying Agent
shall pay in respect of such lost, stolen, defaced or destroyed Certificate
the
Merger Consideration with respect to each share of Company Common Stock formerly
represented by such Certificate.
8
ARTICLE
III
Representations
and Warranties of the Company
The
Company represents and warrants to Parent and Acquisition Sub that, except
as
set forth in the letter, dated as of the date of this Agreement, from the
Company to Parent and Acquisition Sub (the “Company
Disclosure Letter”)
(provided
that,
unless the context indicates or requires otherwise, (i) the representations
and warranties contained herein are made giving effect to the proposed
distribution to all the holders of the Company Common Stock of the Company’s
equity interests in TriMas Corporation as described in Exhibit B (the
“TM
Distribution”),
as if
the consummation of the TM Distribution had occurred prior to the date hereof,
(ii) none of these representations and warranties, other than
Sections 3.05, 3.06, 3.07, 3.12, 3.13 and 3.18, shall relate to TriMas
Corporation) and (iii) to the extent that Sections 3.06, 3.07, 3.12,
and 3.13 relate to TriMas Corporation, such Sections shall only relate to the
Company’s ownership of securities of TriMas Corporation and any liabilities
(contingent or otherwise) of the Company or any Company Subsidiary relating
thereto):
SECTION
3.01. Organization,
Standing and Power.
Each of
the Company and each of its subsidiaries, including such entities organized
under the laws of non-U.S. jurisdictions (the “Company
Subsidiaries”),
is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has full corporate power and
authority, except, in the case of the Company Subsidiaries that are not
Significant Company Subsidiaries (as defined below), where the failure to be
duly organized, validly existing and in good standing, individually or in the
aggregate, has not had and would not be reasonably likely to have a material
adverse effect on the Company (a “Company
Material Adverse Effect”).
The
Company and each Company Subsidiary is duly qualified to do business in each
jurisdiction where the nature of its business or their ownership or leasing
of
its properties make such qualification necessary or the failure to so qualify
has had or would be reasonably likely to have a Company Material Adverse Effect.
The Company has made available to Parent true and complete copies of the
certificates of incorporation of the Company, as amended to the date of this
Agreement (as so amended, the “Company
Charter”),
and
the By-laws of the Company, as amended to the date of this Agreement (as so
amended, the “Company
By-laws”).
SECTION
3.02. Company
Subsidiaries; Equity Interests.
(a)
Section 3.02(a)
of the Company Disclosure Letter lists each Significant Company Subsidiary
(as
defined below) and its jurisdiction of organization. All the outstanding shares
of capital stock of each Company Subsidiary have been validly issued and are
fully paid and nonassessable and are, as of the date of this Agreement, owned
by
the Company, by one or more Company Subsidiaries or by the Company and another
Company Subsidiary, free and clear of all pledges, liens, charges, mortgages,
rights of
9
first
refusal, options, restrictions (other than restrictions imposed under applicable
Law), leases, licenses, easements, encumbrances and security interests of any
kind or nature whatsoever (collectively, “Liens”).
The
Company has made available to Parent true and complete copies of the certificate
of incorporation and by-laws, or comparable charter and organizational
documents, of each Significant Company Subsidiary, in each case amended through
the date of this Agreement. For purposes of this Agreement, a “Significant
Company Subsidiary”
means
any subsidiary of the Company that constitutes a significant subsidiary within
the meaning of Rule 1-02 of Regulation S-X of the Securities and
Exchange Commission (“SEC”).
(b)
Except
for
its interests in the Company Subsidiaries, the Company does not as of the date
of this Agreement own, directly or indirectly, any capital stock, membership
interest, partnership interest, joint venture interest or other equity interest
with a fair market value in excess of $2,000,000 in any
person.
SECTION
3.03. Capital
Structure. (a)
The
authorized capital stock of the Company consists of 250,000,000 shares of
Company Common Stock and 25,000,000 shares of preferred stock, par value
$1.00 per share (“Company
Preferred Stock”
and,
together with the Company Common Stock, the “Company
Capital Stock”).
As of
the date of this Agreement, (i) 42,795,963 shares of Company Common
Stock, 361,001 shares of Series A Company Preferred Stock (the
“Series
A Company Preferred Stock”),
644,540 shares of Series A-1 Company Preferred Stock (the “Series A-1
Company Preferred Stock”),
and
184,153 shares of Series B Company Preferred Stock (the “Series
B Company Preferred Stock”)
were
issued and outstanding, (ii) no shares of Company Common Stock were held by
the Company in its treasury and (iii) 3,251,342 shares of Company Common
Stock were subject to outstanding Company Stock Options (as defined in
Section 6.04), 111,844 shares of Company Common Stock were subject to
contracts to issue Company Stock Options, 48,797 shares of Company Common
Stock were subject to outstanding Company RSUs (as defined in Section 6.04)
and 1,596,814 additional shares of Company Common Stock were reserved for
issuance pursuant to the Company Stock Plan (as defined in Section 6.04).
Except as set forth above, as of the date of this Agreement, no shares of
capital stock or other voting securities of the Company were issued, reserved
for issuance or outstanding. As of the date of this Agreement, there were
outstanding no Company Stock Options to purchase shares of Company Common Stock
with exercise prices on a per share basis lower than $3.00 and the weighted
average exercise price of all Company Stock Options was equal to $9.37 per
share (without giving effect to any adjustment to the exercise price thereof
required for the TM Distribution). All outstanding shares of Company Common
Stock are, and all such shares that may be issued prior to the Effective Time
will be when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to or issued in violation of any purchase option,
call option, right of first refusal, preemptive right, subscription right or
any
similar right under any provision of the DGCL, the Company Charter, the Company
By-laws or any Contract (as defined in Section 3.05) to which the Company
is a party or otherwise bound. There are not any bonds, debentures,
10
notes
or
other indebtedness of the Company having the right to vote (or convertible
into,
or exchangeable for, securities having the right to vote) on any matters on
which holders of Company Common Stock may vote (“Voting
Company Debt”).
Except
as set forth above, there are not any options, warrants, rights, convertible
or
exchangeable securities, “phantom” stock rights, stock appreciation rights,
stock-based performance units, commitments, Contracts, arrangements or
undertakings of any kind to which the Company or any Company Subsidiary is
a
party or by which any of them is bound (i) obligating the Company or any
Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of capital stock or other equity interests in, or
any
security convertible or exercisable for or exchangeable into any capital stock
of or other equity interest in, the Company or of any Company Subsidiary or
any
Voting Company Debt, (ii) obligating the Company or any Company Subsidiary
to issue, grant, extend or enter into any such option, warrant, call, right,
security, commitment, Contract, arrangement or undertaking or (iii) that
give any person the right to receive any economic benefit or right similar
to or
derived from the economic benefits and rights occurring to holders of Company
Common Stock. There are not any outstanding contractual obligations of the
Company or any Company Subsidiary to repurchase, redeem or otherwise acquire
any
shares of capital stock of the Company or any Company Subsidiary.
(b)
Section 3.03(b)
of the Company Disclosure Letter sets forth a true, complete and correct list
of
all outstanding Company Stock Options and Company RSUs, the number of shares
of
Company Common Stock subject to each such Company Stock Option and Company
RSU,
the grant date, exercise price (as applicable), expiration date and vesting
schedule of each such Company Stock Option and Company RSU and the names of
the
holders of each Company Stock Option and Company RSU. All outstanding Company
Stock Options and Company RSUs are evidenced by the Company Stock Option or
Company RSU agreements set forth in Section 3.03(b) of the Company
Disclosure Letter, and no Company Stock Option agreement or Company RSU
agreement contains terms that are inconsistent with, or in addition to, the
terms contained therein.
(c)
All
Company Stock Options and Company RSUs may, by their terms, be treated as
provided for in Section 6.04.
SECTION
3.04. Authority;
Execution and Delivery; Enforceability.
(a)
The
Company has all requisite corporate power and authority to execute and deliver
this Agreement and the Transaction Agreements to which it is a party and to
consummate the Transactions to which it is a party. The execution and delivery
by the Company of this Agreement and each of the Transaction Agreements to
which
it is a party and the consummation by the Company of the Transactions to which
it is a party have been duly authorized by all necessary corporate action on
the
part of the Company, subject, in the case of the Merger, to receipt of the
Company Stockholder Approval. The Company has duly executed and delivered this
Agreement, and each Transaction Agreement to which it is a party and this
Agreement and each Transaction
11
Agreement
to which it is a party, assuming the due authorization, execution and delivery
thereof by the other parties hereto and thereto, constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its
terms.
(b)
The
Board
of Directors of the Company (the “Company
Board”),
at a
meeting duly called and held duly and unanimously adopted resolutions
(i) approving this Agreement and the other Transaction Agreements, the
Merger and the other Transactions, (ii) determining that the terms of the
Merger and the other Transactions are fair to and in the best interests of
the
stockholders of the Company, (iii) directing that this Agreement be
submitted to a vote of the Company’s stockholders, (iv) recommending that
the Company’s stockholders adopt
this
Agreement and (v) declaring that this Agreement is advisable. Such
resolutions are sufficient to render inapplicable to Parent and Acquisition
Sub,
this Agreement and the other Transaction Agreements, and the Merger and the
other Transactions the restrictions on “business combinations” contained in
Section 203 of the DGCL to the extent it is applicable. To the Company’s
knowledge, no other state takeover statute or similar statute or regulation
applies or purports to apply to the Company with respect to this Agreement
and
the other Transaction Agreements, the Merger or any other
Transaction.
(c)
The
only
consent or vote of holders of any class or series of Company Capital Stock
necessary to approve and adopt this Agreement and the Merger is the adoption
of
this Agreement by the holders of a majority of the outstanding Company Common
Stock (the “Company
Stockholder Approval”),
which
may be effected either by the written consent or the affirmative vote at a
stockholders meeting of the holders of a majority of the outstanding Company
Common Stock. The written consent or affirmative vote of the holders of Company
Capital Stock, or any of them, is not necessary to approve any Transaction
Agreement other than this Agreement or to consummate any Transaction other
than
the Merger.
SECTION
3.05. No
Conflicts; Consents. (a)
The
execution and delivery by the Company of this Agreement and each Transaction
Agreement to which it is a party do not, and the consummation of the Merger
and
the other Transactions to which it is a party and compliance with and
performance of the terms hereof and thereof will not, conflict with, or result
in any violation of or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancelation or acceleration
of any obligation or to loss of a material benefit under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any person
under, or result in the creation of any Lien upon any of the properties or
assets of the Company or any Company Subsidiary under, any provision of
(i) the Company Charter, the Company By-laws or the comparable charter or
organizational documents of any Significant Company Subsidiary, (ii) any
contract, lease, license, indenture, note, bond, agreement, permit, concession,
franchise or other instrument (a “Contract”)
to
which the Company or any Company Subsidiary is a party or by which any of their
respective properties or assets is
12
bound
or
(iii) subject to the filings and other matters referred to in
Section 3.05(b), any material judgment, order or decree (“Judgment”)
or
statute, law (including common law), ordinance, rule or regulation
(“Law”)
applicable to the Company or any Company Subsidiary or their respective
properties or assets, other than, in the case of clauses (ii) and (iii)
above, any such items that, individually or in the aggregate, have not had
and
would not be reasonably likely to have a Company Material Adverse Effect
(excluding for purposes of this Section 3.05(a) and the application of
Section 7.02(a) hereto, clause (a)(iii) of the definition “material
adverse effect”).
(b)
No
consent, approval, license, permit, order or authorization (“Consent”)
of, or
registration, declaration or filing with, or permit from, any Federal, state,
local or foreign government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (a “Governmental
Entity”)
is
required to be obtained or made by or with respect to the Company or any Company
Subsidiary in connection with the execution, delivery and performance of this
Agreement or any Transaction Agreement to which it is a party, the consummation
of the Transactions to which it is a party, other than (i) compliance with
and filings under (A) the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the “HSR
Act”),
(B) Japanese Anti-Monopoly Law (Law No. 54 of 1947, as amended),
(the “Japanese
Anti-Monopoly Law”),
(C) other Antitrust Laws (as defined in Section 6.03(c)), (D) the
Foreign Exchange and Foreign Trade Law of Japan (Law No. 228 of 1949, as
amended) (the “FEL”),
(E) the rules and regulations of the TSE, (F) the Japanese Corporation
Law (the “JCL”)
and
(G) the Japanese Commercial Registration Law (Law ▇▇. ▇▇▇ ▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇) (▇▇▇ “▇▇▇”),
(▇▇) the filing with the SEC of (A) an information or proxy statement
with respect to the Merger and the 280G Approval (such information or proxy
statement, including all information required to be included therein by
Rule 13e-3 promulgated under the Securities and Exchange Act of 1934, as
amended (the “Exchange
Act”)
as such
information or proxy statement is amended from time to time, the “Information
Statement”)
and
(B) such reports under Section 13 of the Exchange Act as may be
required in connection with this Agreement, the other Transaction Agreements,
the Merger and the other Transactions, (iii) the filing with the Kanto
Local Finance Bureau (the “Bureau”)
of such
registration, reports and other information (such registration, reports and
other information, as amended from time to time, the “Japanese
Information Statement”)
as may
be required under the Japanese Securities and Exchange Law (Law No. 25 of
1948, as amended) (the “SEL”)
in
connection with the Parent Stock Purchase Agreement, the other Transaction
Agreements, the Parent Stock Acquisition and the other Transactions,
(iv) the filing of the Certificate of Merger with the Secretary of State of
the State of Delaware and appropriate documents with the relevant authorities
of
the other jurisdictions in which the Company is qualified to do business,
(v) compliance with and such filings as may be required under applicable
Environmental Laws (as defined in Section 3.14), (vi) such filings as
may be required in connection with the taxes described in Section 6.09,
(vii) filings under any applicable state takeover Law and (viii) such
other items (A) required solely by reason of the participation of Parent
(as opposed to any third party)
13
in
the
Transactions or (B) that, individually or in the aggregate, have not had
and would not be reasonably likely to have a Company Material Adverse Effect
(excluding for purposes of this Section 3.05(b) and the application of
Section 7.02(a) hereto, clause (a)(iii) of the definition “material
adverse effect”).
SECTION
3.06. SEC
Documents; Undisclosed Liabilities. (a)
The
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company with the SEC since January 3, 2005,
pursuant to Sections 13(a) and 15(d) of the Exchange Act (the “Company
SEC Documents”).
(b) As
of its respective date, each Company SEC Document complied in all material
respects with the requirements of the Exchange Act or the Securities Act of
1933, as amended (the “Securities
Act”),
as the
case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to such Company SEC Document, and 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. The consolidated
financial statements of the Company included in the Company SEC Documents comply
as of their respective dates as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
with
respect thereto, have been prepared in accordance with generally accepted
accounting principles (“GAAP”)
(except, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC) applied on a consistent basis during the periods involved (except
as
may be indicated in the notes thereto) and fairly present the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods shown (subject, in the case of unaudited statements, to normal
year-end audit adjustments and lack of footnote disclosure as permitted by
Form 10-Q of the SEC).
(c)
Except
as
set forth in the most recent audited consolidated balance sheet of the Company
(including the notes thereto) included in the Filed Company SEC Documents (as
defined in Section 3.08) and except for liabilities and obligations
incurred in the ordinary course of business since the date of such balance
sheet, neither the Company nor any Company Subsidiary has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
required by GAAP to be set forth on a consolidated balance sheet of the Company
and its consolidated subsidiaries or in the notes thereto that, individually
or
in the aggregate, would be reasonably likely to have a Company Material Adverse
Effect.
(d)
With
respect to each Company SEC Document that is a report on Form 10-K or 10-Q
or an amendment thereto, the Company is in compliance in all material respects
with the applicable requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act in effect from time
to time.
14
(e)
The
effectiveness of any additional disclosure requirement or applicable accounting
rule, consensus or pronouncement that as of the date of this Agreement has
been
adopted by the SEC, Financial Accounting Standards Board or any similar body
but
that is not yet in effect, is not reasonably likely to lead to any material
change in the Company’s disclosures as set forth in the Filed Company SEC
Documents.
(f)
None
of
the Company Subsidiaries is, or has at any time since January 3, 2005,
been, subject to (separately from the Company) the reporting requirements of
Sections 13(a) and 15(d) of the Exchange Act.
SECTION
3.07. Information
Supplied.
None of
the information supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Information Statement or any other document
(including Schedule 13e-3) required to be filed by the Company with the SEC
relating to the Transactions, including the Merger (together with the
Information Statement, the “Company
Disclosure Documents”)
will
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 are made, not
misleading. The Company Disclosure Documents will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except that no representation is made by the Company
with respect to statements made or incorporated by reference therein or omitted
therefrom based on information supplied by Parent or Acquisition Sub in writing
for inclusion or incorporation by reference therein.
SECTION
3.08. Absence
of Certain Changes or Events. (a)
From
the
date of the most recent audited financial statements included in the Company
SEC
Documents filed and publicly available prior to the date of this Agreement
(the
“Filed
Company SEC Documents”)
to the
date of this Agreement, the Company has conducted its business only in the
ordinary course, and during such period there has not been:
(i) any
event,
change, effect, development or state of facts that, individually or in the
aggregate, has had or would be reasonably likely to have a Company Material
Adverse Effect;
(ii) any
declaration, setting aside, allotment or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any Company
Common Stock or any repurchase for value by the Company of any Company Common
Stock;
(iii) any
split,
combination or reclassification of any Company Common Stock or any issuance
or
the authorization of any issuance of any other securities in respect of, in
lieu
of or in substitution for shares of Company Common Stock;
(iv) (A) any
grant by the Company or any Company Subsidiary to any current director or
officer of the Company or to any other employee or
15
independent
contractor of the Company or any Company Subsidiary reasonably likely to earn
annual base compensation and bonuses in 2006 of $200,000 or more (any such
current director or officer of the Company or other employee or independent
contractor, a “Covered
Participant”)
of any
loan or any increase in any type of compensation, benefits, perquisites or
bonus
or award opportunity, except for grants of normal cash bonus opportunities,
normal increases of cash compensation and increases in fringe or other benefits
that are not material, in each case in the ordinary course of business
consistent with prior practice or as was required under employment agreements
in
effect as of the date of the most recent audited financial statements included
in the Filed Company SEC Documents, (B) any grant by the Company or any
Company Subsidiary to any Covered Participant of any severance, change in
control, termination or similar compensation or benefits or increases therein,
or of the right to receive any severance, change in control, termination or
similar compensation or benefits or increases therein, except as was required
under employment, severance or termination agreements in effect as of the date
of the most recent audited financial statements included in the Filed Company
SEC Documents, (C) any action by the Company or any Company Subsidiary to
fund or in any other way secure the payment of a material amount of compensation
or benefits under any Company Benefit Plan (as defined in Section 3.10(a))
or Company Benefit Agreement (as defined in Section 3.10(b)) or
(D) any entry by the Company or any Company Subsidiary into, or any
amendment of, any Company Benefit Agreement with any Covered
Participant;
(v) any
damage, destruction or loss, whether or not covered by insurance, that,
individually or in the aggregate, would be reasonably likely to have a Company
Material Adverse Effect;
(vi) any
change
in accounting methods, principles or practices by the Company or any Company
Subsidiary materially affecting the consolidated assets, liabilities or results
of operations of the Company, except insofar as may have been required by a
change in GAAP or applicable Law;
(vii) any
material elections with respect to Taxes (as defined in Section 3.09) by
the Company or any Company Subsidiary or settlement or compromise by the Company
or any Company Subsidiary of any material Tax liability or refund
claim;
(viii) any
material revaluation by the Company or any Company Subsidiary of any of the
material assets of the Company or any Company Subsidiary, except insofar as
may
have been required by applicable Law; or
(ix) any
action
by the Company or any Company Subsidiary which, if taken after the date hereof,
would constitute a breach of any provisions of Section 5.01(a)(ii), (iv),
(vii), (viii) or (xii) or any authorization, consent or
16
agreement
by the Company or any Company Subsidiary to take any of the actions prohibited
by the foregoing provisions of Section 5.01(a).
SECTION
3.09. Taxes. (a)
The
Company, and each Company Subsidiary, has duly and timely filed, or has caused
to be timely filed on its behalf, all material Tax Returns required to be filed
by it. All such Tax Returns were true, correct and complete in all material
respects. All material Taxes owed (whether or not shown on any Tax Return)
have
been timely paid in full. To the Company’s knowledge, no claim has been made in
writing during the three year period ending on the Closing Date by an authority
in a jurisdiction where the Company, or any Company Subsidiary, does not file
Tax Returns that the Company, or any Company Subsidiary, is or may be subject
to
taxation by that jurisdiction. There are no liens with respect to Taxes upon
any
asset of the Company, or any Company Subsidiary, other than liens for Taxes
not
yet due and payable.
(b)
The
Company, and each Company Subsidiary, has deducted, withheld and timely paid
to
the appropriate governmental authority all material Taxes required to be
deducted, withheld or paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third party,
and the Company, and each Company Subsidiary, has complied with all material
reporting and record keeping requirements.
(c)
No
dispute, audit, investigation, proceeding or claim concerning any material
Tax
liability of the Company, or any Company Subsidiary, has been raised by a
governmental authority in writing, and to the Company’s knowledge, no such
dispute, audit, investigation, proceeding, or claim is pending or being
conducted. The Company has provided or made available to Parent true, correct
and complete copies of all material Tax Returns, examination reports, and
statements of deficiencies filed, assessed against, or agreed to by the Company
or any Company Subsidiary since January 1, 2001.
(d)
The
Company, and each Company Subsidiary, has not waived any statute of limitations
in respect of material Taxes or agreed to any extension of time with respect
to
a material Tax assessment or deficiency. The Company, and each Company
Subsidiary, has not executed any power of attorney with respect to any Tax,
other than powers of attorney that are no longer in force. Section 3.09(d)
of the Company Disclosure Letter lists all closing agreements, private letter
rulings, technical advice memoranda or similar agreements or rulings relating
to
Taxes that have been entered into or issued by any governmental authority with
or in respect of the Company, and each Company Subsidiary since January 1,
2001.
(e)
Since
January 1, 2001, the Company, and each Company Subsidiary, has not been a
member of an “affiliated group” within the meaning of Code Section 1504(a)
filing a consolidated federal income Tax Return (other than the “affiliated
group” as defined in Code Section 1504(a) the common parent of which is
Company). The Company, and each Company Subsidiary, is not a party to any
17
contractual
obligation relating to Tax sharing or Tax allocation, other than customary
commercial agreements with vendors, lenders, customers and other third parties
(such as tax gross-ups in loan agreements or property tax escalation clauses
in
real estate leases) entered into in the ordinary course of business. The
Company, and each Company Subsidiary, does not have any material liability
for
the Taxes of any person under Treas. Reg. Section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor or
by
contract.
(f)
The
Company, and each Company Subsidiary, will not be required to include any amount
in taxable income or exclude any item of deduction or loss from taxable income
for any taxable period (or portion thereof) ending after the Closing Date as
a
result of (a) any “closing agreement” as described in Code
Section 7121 (or any corresponding or similar provision of state, local or
foreign Income Tax law) executed on or prior to the Closing Date, (b) any
deferred intercompany gain or excess loss account described in Treas. Reg.
Section 1502 (or any corresponding or similar provision or administrative
rule of federal, state, local or foreign law), (c) any installment sale or
open transaction disposition made on or prior to the Closing Date, or
(d) any prepaid amount received on or prior to the Closing
Date.
(g)
The
Company, and each Company Subsidiary, has not been a United States real property
holding company within the meaning of Code § 897(c)(2) during the period
specified in Code § 897(c)(l)(A)(ii).
(h)
The
Company, and each Company Subsidiary, has not, since January 1, 2001, been
a “distributing corporation” or a “controlled corporation” within the meaning of
Code Section 355(a)(1)(A).
(i)
Neither
the Company nor any Company Subsidiary has participated in any “listed
transaction”, as defined in Treas. Reg. Section 1.6011-4(b).
(j)
For
purposes of this Agreement:
“Code”
means
the United States Internal Revenue Code of 1986, as amended.
“Tax”
or
“Taxes”
means
(i) any and all federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security (or similar, including FICA),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind or any charge of any kind in the nature of (or similar
to) taxes whatsoever, including any interest, penalty, or addition thereto,
whether disputed or not and (ii) any liability for the payment of any
amounts of the type described in clause (i) of this definition as a result
of being a member of an affiliated, consolidated, combined or unitary group
for
any
18
period,
as
a result of any tax sharing or tax allocation agreement, arrangement or
understanding, or as a result of being liable for another person’s taxes as a
transferee or successor or by contract.
“Tax
Return”
or
“Return”
means
all Federal, state, local, provincial and foreign Tax returns, declarations,
statements, reports, schedules, forms and information returns and any amended
Tax return relating to Taxes.
SECTION
3.10. Absence
of Changes in Benefit Plans. (a)
From
the
date of the most recent audited financial statements included in the Filed
Company SEC Documents to the date of this Agreement, neither the Company nor
any
Company Subsidiary has terminated, adopted, amended, modified or agreed to
terminate, adopt, amend or modify (or announced an intention to terminate,
adopt, amend or modify), in any material respect, any collective bargaining
agreement or any bonus, pension, profit sharing, deferred compensation,
incentive compensation, equity compensation, stock ownership, stock purchase,
stock appreciation, restricted stock, stock option, phantom stock, performance,
retirement, thrift, savings, stock bonus, cafeteria, paid time off, perquisite,
fringe benefit, vacation, unemployment insurance, severance, change in control,
termination, retention, disability, death benefit, hospitalization, medical
or
other welfare benefit or other employee benefit plan, program, policy or
arrangement, whether oral or written, funded or unfunded, sponsored, maintained,
contributed to or required to be sponsored, maintained or contributed to by
the
Company or any Company Subsidiary or any other person or entity that, together
with the Company or any Company Subsidiary, is treated as a single employer
under Section 414(b), (c), (m) or (o) of the Code or any other applicable
Law (each, a “Commonly
Controlled Entity”),
in
each case providing benefits to any current or former director, officer,
employee or independent contractor of the Company or any Company Subsidiary
(each, a “Participant”)
and
whether or not subject to United States law (all such plans, programs and
arrangements, including any such plan, program or arrangement entered into
or
adopted on or after the date of this Agreement, “Company
Benefit Plans”)
or has
made any material change in any actuarial or other assumption used to calculate
funding obligations with respect to any Company Benefit Plan that is a Company
Pension Plan (as defined in Section 3.11(a)), or any material change in the
manner in which contributions to any such Company Pension Plan are made or
the
basis on which such contributions are determined.
(b)
As
of the
date of this Agreement, there is not any material (i) employment, deferred
compensation, severance, change in control, termination, employee benefit,
loan,
indemnification, retention, equity compensation, bonus, award, consulting or
similar agreement between the Company or any Company Subsidiary, on the one
hand, and any Participant, on the other hand, (ii) agreement between the
Company or any Company Subsidiary, on the one hand, and any Participant, on
the
other hand, the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of transactions involving the Company
or
any Company Subsidiary
19
of
the
nature contemplated by this Agreement or (iii) trust or insurance Contract
or other agreement to fund or otherwise secure payment of any compensation
or
benefit to be provided to any Participant (all such agreements under
clauses (i), (ii) and (iii), collectively, “Company
Benefit Agreements”).
(c)
To
the
Company's knowledge, the exercise price of each Company Stock Option is not
less
than the fair market value of a share of Company Common Stock as determined
on
the date of grant of such Company Stock Option.
SECTION
3.11. ERISA
Compliance; Excess Parachute Payments.
(a)
Section 3.11(a)
of the Company Disclosure Letter contains a complete and correct list of all
Company Benefit Plans that are “employee pension benefit plans” (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”))
(a
“Company
Pension Plan”)
or
“employee welfare benefit plans” (as defined in Section 3(1) of ERISA) and
all other material Company Benefit Plans. The Company has delivered or made
available to Parent complete and correct copies of (i) each such Company
Benefit Plan and each material Company Benefit Agreement (or, in the case of
any
such Company Benefit Plan or material Company Benefit Agreement that is
unwritten, a written description thereof), (ii) the two most recent annual
reports required to be filed, or such similar reports, statements, information
returns or material correspondence required to be filed with or delivered to
any
Governmental Entity, with respect to each material Company Benefit Plan
(including reports filed on Form 5500 with accompanying schedules and
attachments), (iii) the most recent summary plan description for each
material Company Benefit Plan for which a summary plan description is required
under applicable Law, and any summary of material modifications prepared for
each material Company Benefit Plan, (iv) each trust agreement and group
annuity or insurance contract and other documents relating to the funding or
payment of benefits under any material Company Benefit Plan, (v) the most
recent determination or qualification letter issued by any Governmental Entity
for each Company Benefit Plan intended to qualify for favorable tax treatment
for which such a letter has been obtained, as well as a true, correct and
complete copy of each pending application therefor, if applicable, and
(vi) the two most recent actuarial valuations for each material Company
Benefit Plan for which actuarial valuations have been obtained.
(b)
Each
Company Benefit Plan has been administered in compliance with its terms, and
each Company Benefit Plan (and the Company and the Company Subsidiaries with
respect to such plans) is in compliance with applicable Law, including ERISA
and
the Code, and the terms of any applicable collective bargaining agreements,
except for such instances of noncompliance with either plan terms or Laws that,
individually or in the aggregate, have not had and would not reasonably be
likely to have a Company Material Adverse Effect.
(c)
Each
Company Pension Plan intended to be tax qualified under United States Laws
is so
qualified and has been the subject of determination letters from the
20
Internal
Revenue Service with respect to all tax Law changes with respect to which the
Internal Revenue Service is willing to provide a determination letter, to the
effect that such Company Pension Plan is qualified and exempt from United States
Federal income taxes under Sections 401(a) and 501(a), respectively, of the
Code; no such determination letter has been revoked (nor, to the knowledge
of
the Company, has revocation been threatened) nor has any such Company Pension
Plan been amended since the date of its most recent determination letter or
application therefor in any respect that would adversely affect its
qualification or require security under Section 307 of ERISA, except for
such failures to qualify or to obtain such a determination letter and such
revocations of determination letters and amendments that, individually or in
the
aggregate, have not had and would not be reasonably likely to have a Company
Material Adverse Effect. Each Company Benefit Plan required to have been
approved by any non-U.S. Governmental Entity (or permitted to have been approved
to obtain any beneficial tax or other status) has been so approved; no such
approval has been revoked (nor, to the knowledge of the Company, has revocation
been threatened) and no event has occurred since the date of the most recent
approval that could reasonably be expected to affect any such approval, except
for such failures to approve, revocations of approval and events that,
individually or in the aggregate, have not had and would not be reasonably
likely to have a Company Material Adverse Effect.
(d)
Except
for
liability that would not be reasonably likely to have a Company Material Adverse
Effect, no liability under Title IV of ERISA or to the Pension Benefit
Guaranty Corporation (other than PBGC insurance premiums) has been or is
expected to be incurred by the Company or any Company Subsidiary or Commonly
Controlled Entity with respect to any ongoing, frozen or terminated
“single-employer” plan (as defined in Section 4001(a)(15) of ERISA),
currently or formerly maintained by any of them. None of the Company Pension
Plans has an “accumulated funding deficiency” (as defined in Section 302 of
ERISA or Section 412 of the Code), whether or not waived, nor has any
waiver of the minimum funding standards of Section 302 of ERISA or
Section 412 of the Code been requested. None of the Company Pension Plans
and related trusts has been terminated, nor has there been any “reportable
event” (as defined in Section 4043 of ERISA) with respect to any Company
Pension Plan, in each case during the last six years, and no notice of a
reportable event will be required to be filed in connection with the
Transactions, except for such terminations and reportable events that,
individually or in the aggregate, have not had and would not be reasonably
likely to have a Company Material Adverse Effect. None of the Company, any
Company Subsidiary or any Commonly Controlled Entity has incurred, or reasonably
expects to incur, a “complete withdrawal” or a “partial withdrawal” (as each
such term is defined in Sections 4203 and 4205, respectively, of ERISA)
since the effective date of such Sections 4203 and 4205 with respect to any
Company Pension Plan that is a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA that has had or would be reasonably likely to
have a Company Material Adverse Effect.
21
(e)
None
of
the Company, any Company Subsidiary, any employee of the Company or any Company
Subsidiary, any of the Company Benefit Plans, including the Company Pension
Plans and, to the knowledge of the Company, any trusts created under any of
the
Company Benefit Plans or any trustee, administrator or other fiduciary of any
Company Benefit Plan or trust created thereunder and any agent of the foregoing,
has engaged in a “prohibited transaction” (as defined in Section 406 of
ERISA or Section 4975 of the Code) or any other breach of fiduciary
responsibility that could subject the Company, any Company Subsidiary, any
such
employee or any of the Company Benefit Plans, or, to the knowledge of the
Company, any such trust, trustee, administrator or other fiduciary, to the
tax
or penalty on prohibited transactions imposed by Section 4975 of the Code,
the sanctions imposed under Title I of ERISA or other substantially similar
applicable Law or any other liability for breach of fiduciary duty under ERISA
or any other applicable Law, except for such prohibited transactions and other
breaches of fiduciary responsibility that, individually or in the aggregate,
have not had and would not be reasonably likely to have a Company Material
Adverse Effect.
(f)
With
respect to any Company Benefit Plan that is an employee welfare benefit plan,
whether or not subject to ERISA, (i) no such Company Benefit Plan is funded
through a “welfare benefits fund” (as defined in Section 419(e) of the
Code), (ii) each such Company Benefit Plan that is a “group health plan”
(as defined in Section 5000(b)(1) of the Code) complies with the applicable
requirements of Section 4980B(f) of the Code and any similar state statute,
except for such failures to comply that, individually or in the aggregate,
have
not had and would not be reasonably likely to have a Company Material Adverse
Effect, (iii) no such Company Benefit Plan provides benefits after
termination of employment, except where the cost thereof is borne entirely
by
the former employee (or his or her eligible dependents or beneficiaries) or
as
required by Section 4980B(f) of the Code and (iv) each such Company
Benefit Plan (including any such Company Benefit Plan covering retirees or
other
former employees) may be amended or terminated without material liability to
the
Company or any Company Subsidiary on or at any time after the Effective
Time.
(g)
Except
pursuant to arrangements agreed in writing by Parent or its affiliates, no
amount, economic benefit or other entitlement that could be received (whether
in
cash or property or the vesting of property) as a result of any of the
Transactions (alone or in combination with any other event) by any person who
is
a “disqualified individual” (as defined in Treasury Regulation
Section 1.280G-1) with respect to the Company (“Potential
Parachute Payment”)
would
be characterized as an “excess parachute payment” (as defined in
Section 280G(b)(1) of the Code), and no such disqualified individual is
entitled to receive any additional payment from the Company, the Surviving
Corporation or any other person in the event that the excise tax required by
Section 4999(a) of the Code is imposed on such disqualified
individual.
(h)
Except
pursuant to (i) arrangements agreed in writing by Parent or its affiliates
and (ii) the accelerated vesting of Company Stock Options held by any
22
Participant,
no Participant will be entitled to (A)(1) any severance, separation, change
of control, termination, bonus or other additional compensation or benefits,
or
(2) any acceleration of the time of payment or vesting of any compensation
or benefits or any forgiveness of indebtedness owed by such Participant, in
each
case as a result of any of the Transactions (alone or in combination with any
other event) or in connection with the termination of such Participant’s
employment on or after the Effective Time or (B) any compensation or
benefits related to or contingent upon, or the value of which will be calculated
on the basis of, any of the Transactions (alone or in combination with any
other
event). The execution and delivery of this Agreement and the consummation of
the
Transactions (alone or in combination with any other event) and compliance
by
the Company with the provisions hereof do not and will not require the funding
(whether through a grantor trust or otherwise) of any Company Benefit Plan,
Company Benefit Agreement or any other employment arrangement and will not
limit
the Company’s ability to amend, modify or terminate any Company Benefit Plan or
Company Benefit Agreement.
(i)
Since
January 1, 2003, and through the date of this Agreement, neither the
Company nor any Company Subsidiary has received notice of, and, to the knowledge
of the Company, there are no (i) pending termination proceedings or other
suits, claims (except claims for benefits payable in the normal operation of
the
Company Benefit Plans), actions or proceedings against, or involving or
asserting any rights or claims to benefits under, any Company Benefit Plan
or
Company Benefit Agreement or (ii) pending investigations (other than
routine inquiries) by any Governmental Entity with respect to any Company
Benefit Plan or Company Benefit Agreement, except for such proceedings, suits,
claims, actions and investigations that, individually or in the aggregate,
have
not had and would not be reasonably likely to have a Company Material Adverse
Effect.
(j)
Neither
the Company nor any Company Subsidiary has any liability or obligations,
including under or on account of a Company Benefit Plan or Company Benefit
Agreement, arising out of the hiring of persons to provide services to the
Company or any Company Subsidiary and treating such persons as consultants
or
independent contractors and not as employees of the Company or any Company
Subsidiary, except for any such liability and obligations that, individually
or
in the aggregate, have not had and would not be reasonably likely to have a
Company Material Adverse Effect.
(k)
None
of
the employees of the Company or any Company Subsidiary is a member of,
represented by or otherwise subject to any (i) labor union, works council
or similar organization or (ii) collective bargaining agreement,
industry-wide collective bargaining agreement or any similar collective
agreement, in each case with respect to such employee’s employment by the
Company or any Company Subsidiary, and the Company and the Company Subsidiaries
do not have any obligation (including to inform or consult with any such
employees or their representatives in respect of the
23
Transactions)
with respect to any such organization or agreement. Each of the Company and
the
Company Subsidiaries is in compliance with all applicable Laws and orders with
respect to labor relations, employment and employment practices, occupational
safety and health standards, terms and conditions of employment, payment of
wages, classification of employees, immigration, visa, work status, pay equity
and workers compensation, and is not engaged in any unfair labor practice,
except for such failures to comply and unfair labor practices that, individually
or in the aggregate, have not had and would not be reasonably likely to have
a
Company Material Adverse Effect. There is no unfair labor practice
charge or complaint against the Company or any Company Subsidiary pending or,
to
the knowledge of the Company, threatened before the National Labor Relations
Board or any comparable Governmental Entity that has had or would be reasonably
likely to have a Company Material Adverse Effect. Since December 31, 2003,
there has been no, and there currently is no, labor strike, material dispute,
request for representation, union organization attempt, slowdown or stoppage
actually pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Company Subsidiary that, individually or in the
aggregate, has had or would reasonably be expected to have a Company Material
Adverse Effect. No grievance or arbitration proceeding arising out of a
collective bargaining agreement is pending or, to the knowledge of the Company,
threatened against the Company or any Company Subsidiary that has had or would
be reasonably likely to have a Company Material Adverse Effect.
SECTION
3.12. Litigation. (a)
As
of the
date of this Agreement, there is no claim, demand, suit, action or proceeding
pending or, to the knowledge of the Company, threatened in writing against
or
affecting the Company or any Company Subsidiary that involves an amount in
controversy in excess of $1.0 million, seeks material injunctive relief or
would be reasonably likely to have a Company Material Adverse Effect, if
resolved in accordance with the plaintiff’s demands.
(b)
There
is
no suit, action or proceeding pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Company Subsidiary nor is
there any judgment outstanding against the Company or any Company Subsidiary
that, individually or in the aggregate, has had or would be reasonably likely
to
have a Company Material Adverse Effect.
SECTION
3.13. Compliance
with Applicable Laws.
The
Company and the Company Subsidiaries and their relevant personnel and operations
are in compliance with all applicable Laws, including those relating to
occupational health and safety except for any such failure to be in compliance
as, individually or in the aggregate, has not had and would not be reasonably
likely to have a Company Material Adverse Effect. Neither the Company nor any
Company Subsidiary has received any written communication during the past two
years from a Governmental Entity that alleges that the Company or a Company
Subsidiary is not in compliance with any applicable Law except for such failure
to be in compliance as, individually or in the aggregate, has not had and would
not be reasonably likely to have a Company Material Adverse Effect.
24
The
Company and the Company Subsidiaries have in effect all permits, licenses,
variances, exemptions, authorizations, operating certificates, franchises,
orders and approvals of all Governmental Entities (collectively, “Permits”),
necessary for them to own, lease or operate their properties and assets and
to
carry on their businesses as now conducted, except for such Permits the absence
of which, individually or in the aggregate, has not had and would not be
reasonably likely to have a Company Material Adverse Effect and there has
occurred no violation of, default (with or without the lapse of time or the
giving of notice, or both) under, or event giving to others any right of
termination, amendment or cancelation of, with or without notice or lapse of
time or both, any such Permit, except for such violations, defaults or events
that, individually or in the aggregate, have not had and would not be reasonably
likely to have a Company Material Adverse Effect. This Section 3.13 does
not relate to matters with respect to Taxes, which are the subject of
Section 3.09 or to Environmental Permits or Environmental Laws, which are
the subject of Section 3.14.
SECTION
3.14. Environmental
Matters.
Except
for such matters that, individually or in the aggregate, have not had and would
not be reasonably likely to have a Company Material Adverse Effect:
(a)
The
Company and each of the Company Subsidiaries are in compliance with all
Environmental Laws (as defined below).
(b)
Since
July 31, 2003, neither the Company nor any of the Company Subsidiaries has
received any written communication that alleges that the Company or any of
its
subsidiaries is in violation of or has liability under any Environmental Law
or
written request for information pursuant to any Environmental Law.
(c)
(i) The
Company and each of the Company Subsidiaries have obtained and are in compliance
with all Permits pursuant to Environmental Law (collectively “Environmental
Permits”)
necessary for their operations as presently conducted and (ii) all such
Environmental Permits are valid and in good standing.
(d)
There
are
no Environmental Claims pending or, to the knowledge of the Company, threatened
in writing, against the Company or any of the Company Subsidiaries.
(e)
Neither
the Company nor any of the Company Subsidiaries has entered into or agreed
to,
or is otherwise subject to, any Judgment relating to any Environmental Law
or to
the investigation or remediation of Hazardous Materials (as defined
below).
(f)
There
has
been no treatment, storage or Release (as defined below) of any Hazardous
Material that would be reasonably likely to form the basis of any Environmental
Claim against the Company or any of the Company Subsidiaries or
25
against
any person whose liabilities the Company or any of the Company Subsidiaries
has
retained or assumed either contractually or by operation of law.
(g)
None
of
the Company, the Company Subsidiaries or any Person whose liabilities the
Company or any of the Company Subsidiaries has, or may have, retained or
assumed, either contractually or by operation of law, has manufactured, sold
or
distributed any products containing asbestos in any form.
(h)
(i)
Neither the Company nor any of the Company Subsidiaries has retained or assumed,
either contractually or by operation of law, any liabilities or obligations
that
would be reasonably likely to form the basis of any Environmental Claim (as
defined below) against the Company or any of the Company Subsidiaries, and
(ii)
to the knowledge of the Company, no Environmental Claims are pending against
any
Person whose liabilities the Company or any of the Company Subsidiaries has,
or
may have, retained or assumed, either contractually or by operation of
law.
(i)
Definitions.
As used
in this Agreement:
(1) “Environmental
Claim”
means
any and all administrative, regulatory or judicial actions, suits, demands,
directives, claims, liens, Judgments, investigations, proceedings or written
notices of noncompliance, violation or potential responsibility alleging
liability of whatever kind or nature (including liability or responsibility
for
the costs of enforcement proceedings, investigations, cleanup, governmental
response, removal or remediation, natural resources damages, property damages,
personal injuries, medical monitoring, penalties, contribution, indemnification
and injunctive relief) arising out of, based on or resulting from (x) the
presence or Release of, or exposure to, any Hazardous Materials at any location;
or (y) the failure to comply with any Environmental Law;
(2) “Environmental
Laws”
means
all applicable Federal, state, local and foreign laws, rules, regulations,
Judgments, legally binding agreements or Environmental Permits issued,
promulgated or entered into by or with any Governmental Entity, relating to
pollution or protection or restoration of natural resources or the environment
(including ambient air, indoor air, surface water, groundwater, land surface
or
subsurface strata), endangered or threatened species or human health (to the
extent relating to exposure to Hazardous Materials);
(3) “Hazardous
Materials”
means
(y) any petroleum or petroleum products, radioactive materials or wastes,
asbestos in any form, urea formaldehyde foam insulation and polychlorinated
biphenyls; and (z) any other chemical, material, substance or waste that is
prohibited, limited or regulated under any Environmental Law; and
26
(4) “Release”
means
any actual or threatened release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into
or
through the environment (including ambient air, indoor air, surface water,
groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.
SECTION
3.15. Intellectual
Property.
The
Company or one of the Company Subsidiaries owns, or is validly licensed or
otherwise has the right to use, all patents, patent rights, trademarks,
trademark rights, trade names, trade name rights, service marks, service ▇▇▇▇
rights, copyrights, domain names and other proprietary intellectual property
rights and computer programs (collectively, “Intellectual
Property Rights”)
used in
the conduct of the business of the Company and the Company Subsidiaries, except
where the failure to own, be validly licensed or have the right to use such
Intellectual Property Rights, individually or in the aggregate, has not had
and
would not be reasonably likely to have a Company Material Adverse Effect. No
claims are pending or, to the knowledge of the Company, threatened in writing
that the Company or any Company Subsidiary is infringing or otherwise adversely
affecting the rights of any person with regard to any Intellectual Property
Right, except for any such claims that, individually or in the aggregate, have
not had and would not be reasonably likely to have a Company Material Adverse
Effect. To the knowledge of the Company, no person is infringing the rights
of
the Company or any Company Subsidiary with respect to any Intellectual Property
Right, except for such infringements that, individually or in the aggregate,
have not had and would not be reasonably likely to have a Company Material
Adverse Effect.
SECTION
3.16. Contracts;
Debt Instruments. (a)
Except
as
filed by the Company as an exhibit to a Filed SEC Document, there are no
Contracts that are “material contracts” within the meaning of Section 601
of Regulation S-K of the SEC (any such Contract a “Company
Material Contract”).
None
of the Company, any of the Company Subsidiaries or, to the knowledge of the
Company, any other party to any Company Material Contract is in violation of
or
in default under (nor does there exist any condition which upon the passage
of
time or the giving of notice would cause such a violation of or default under)
any Company Material Contract, to which it is a party or by which it or any
of
its properties or assets is bound, except for violations or defaults that,
individually or in the aggregate, have not resulted and would not be reasonably
likely to result in a Company Material Adverse Effect.
(b)
All
Company Material Contracts are valid, binding and in full force and effect
and
are enforceable by the Company or the applicable Company Subsidiary in
accordance with their terms, except for such failures to be valid, binding,
in
full force and effect or enforceable that, individually or in the aggregate,
have not had and would not be reasonably likely to have a Company Material
Adverse Effect. None of the Company and the Company Subsidiaries has received
any written notice of the intention of any party to terminate any Company
Material Contract. Complete and correct copies of all
27
Company
Material Contracts, together with all material modifications and amendments
thereto, have been made available to Parent (either as an exhibit to a Filed
SEC
Document or otherwise).
SECTION
3.17. Title
to Real Properties. (a)
Each
of
the Company and each Company Subsidiary has good and marketable title to, or
valid leasehold interests in, all its real properties free and clear of all
Liens, except for such defects in title, easements, restrictive covenants and
similar encumbrances or impediments that, individually or in the aggregate,
have
not had and would not be reasonably likely to have a Company Material Adverse
Effect.
(b)
Except
where the failure to comply, the failure to be in full force and effect or
the
default has not had and would not be reasonably likely to have a Company
Material Adverse Effect, each of the Company and each Company Subsidiary has
complied in all respects with the terms of all leases to which it is a party
and
under which it is in occupancy, all such leases are in full force and effect
and
no extant notice of default has been given by either party to such leases,
and
no event has occurred, which with the giving of notice or the passage of time
or
both would constitute a default under any of such leases.
SECTION
3.18. TM
Distribution. (a)
The
Company has all requisite corporate power and authority to consummate the TM
Distribution. The declaration (subject to the satisfaction of the TM
Distribution Conditions (as defined below)) and public announcement of the
TM
Distribution has been duly authorized by all necessary corporate action on
the
part of the Company. The Company Board, at a meeting duly called and held,
duly
and unanimously adopted resolutions declaring the TM Distribution, subject
to
the satisfaction of the TM Distribution Conditions. The payment of the TM
Distribution, which will be made to Company common stockholders of record as
of
one business day prior to the Closing Date, is subject to (i) the receipt
and effectiveness of the consents required from the holders of the Notes and
the
Company Preferred Stock, (ii) the completion of the Financing or Alternative
Financing on terms permitting the TM Distribution, (iii) the Company obtaining
a
customary solvency opinion verifying the adequacy of the Company’s corporate
surplus for the TM Distribution under Delaware law and (iv) the
consummation of the Merger (collectively, the “TM
Distribution Conditions”).
(b)
Subject
to
the satisfaction of the TM Distribution Conditions, the consummation of the
TM
Distribution will not conflict with or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancelation or acceleration of any obligation or to loss
of a material benefit under, or to increased, additional, accelerated or
guaranteed rights or entitlements of any person under, or result in the creation
of any Lien upon any of the properties or assets of the Company or any Company
Subsidiary under, any provision of (i) the Company Charter, the Company
By-laws or the comparable charter or organizational documents of
28
any
Significant Company Subsidiary, (ii) any Contract to which the Company or
any Company Subsidiary is a party or by which any of their respective properties
or assets is bound or (iii) subject to the filings and other matters
referred to in Section 3.18(c), any material Judgment or Law applicable to
the Company or any Company Subsidiary or their respective properties or assets,
other than, in the case of clauses (ii) and (iii) above, any such items
that, individually or in the aggregate, have not had and would not be reasonably
likely to have a Company Material Adverse Effect (excluding for purposes of
this
Section 3.18(b) and the application of Section 7.02(a) hereto,
clause (a)(iii) of the definition “material adverse effect”).
(c)
Subject
to
the satisfaction of the TM Distribution Conditions, no consent of, or
registration, declaration or filing with, or permit from, any Governmental
Entity is required to be obtained or made by or with respect to the Company
or
any Company Subsidiary in connection with the consummation of the TM
Distribution, other than (i) compliance with and filings under the HSR Act,
(ii) the preparation and distribution (A) of an information statement
with respect to the TM Distribution and (B) such reports under
Section 13 of the Exchange Act as may be required in connection with the TM
Distribution, (ii) compliance with and such filings as may be required
under applicable Environmental Laws (as defined in Section 3.14),
(iii) such filings as may be required in connection with the taxes
described in Section 6.09, (iv) filings under any applicable state
takeover Law and (v) such other items that, individually or in the
aggregate, have not had and would not be reasonably likely to have a Company
Material Adverse Effect (excluding for purposes of this Section 3.18(c) and
the application of Section 7.02(a) hereto, clause (a)(iii) of the
definition “material adverse effect”).
SECTION
3.19. Customers
and Suppliers. (a)
Since
January 1, 2005, there has been no adverse change in the relationship of
the Company with any customer of the Company or any Company Subsidiary with
annual sales of $50 million or more or any of the 15 largest suppliers to
the Company or any Company Subsidiary by annual sales volume (excluding
utilities) except in any such case for any such change that, individually or
in
the aggregate, has not had and would not be reasonably likely to have a Company
Material Adverse Effect.
(b)
To
the
Knowledge of the Company, there is no material dispute with any customer with
annual sales of $50 million or more in connection with any product sold by
the Company or any Company Subsidiary to any such customer that has given rise
or would be reasonably likely to give rise to a material liability or cost,
except for such dispute that, individually or in the aggregate, has not had
and
would not be reasonably likely to have a Company Material Adverse
Effect.
SECTION
3.20. Brokers;
Schedule of Fees and Expenses.
No
broker, investment banker, financial advisor or other person, other than Lazard
Freres & Co. LLC, the fees and expenses of which will be paid by the Company
and have been disclosed to Parent in the Company Disclosure Letter, is entitled
to any broker’s,
29
finder’s,
financial advisor’s or other similar fee or commission in connection with the
Merger and the other Transactions based upon arrangements made by or on behalf
of the Company.
SECTION
3.21. Opinion
of Financial Advisor.
The
Company has received the opinion of Lazard Freres & Co. LLC, dated the date
of this Agreement, to the effect that, as of such date, the consideration to
be
received in the Merger by holders of Company Common Stock, other than the
Principal Company Stockholders, is fair to such holders of Company Common Stock
from a financial point of view, a signed copy of which opinion has been
delivered to Parent.
ARTICLE
IV
Representations
and Warranties of Parent and Acquisition
Sub
Parent
and
Acquisition Sub, jointly and severally, represent and warrant to the Company
that:
SECTION
4.01. Organization,
Standing and Power.
(a) Each of Parent and Acquisition Sub is duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it is organized
and has full corporate power and authority to conduct its businesses as
presently conducted.
SECTION
4.02. Acquisition
Sub. (a)
Since
the
date of its incorporation, Acquisition Sub has not carried on any business
or
conducted any operations other than the execution of this Agreement, the
Transaction Agreements to which it is a party and the Commitments (as defined
in
Section 4.07), arranging the Financing (as defined in Section 4.07) and the
performance of its obligations hereunder and thereunder and matters ancillary
thereto.
(b)
The
authorized capital stock of Acquisition Sub consists of 1,000 shares of common
stock, par value $0.01 per share, all of which have been validly issued, are
fully paid and nonassessable and are owned by Parent free and clear of any
Lien.
(c)
As
of the
date of this Agreement, neither Parent nor Sub owns any shares of Company Common
Stock.
SECTION
4.03. Authority;
Execution and Delivery; Enforceability.
Each of
Parent and Acquisition Sub has all requisite corporate power and authority
to
execute and deliver this Agreement and each Transaction Agreement to which
it is
a party and to consummate the Transactions to which it is a party subject to
the
compliance by Parent with Section 6.03(e). The execution and delivery by
each of Parent and Acquisition Sub of this Agreement and each Transaction
Agreement to which
30
it
is a
party and the consummation by it of the Transactions to which it is a party
have
been duly authorized by all necessary corporate action on the part of Parent
and
Acquisition Sub subject to the compliance by Parent with Section 6.03(e).
Each of Parent and Acquisition Sub has duly executed and delivered this
Agreement and each Transaction Agreement to which it is a party, and this
Agreement and each Transaction Agreement to which it is a party, assuming the
due authorization, execution and delivery thereof by the other parties thereto,
constitutes its legal, valid and binding obligation, enforceable against it
in
accordance with its terms.
SECTION
4.04. No
Conflicts; Consents. (a)
The
execution and delivery by each of Parent and Acquisition Sub of this Agreement
and each Transaction Agreement to which it is a party, do not, the execution
of
the Parent Voting Agreement does not and the consummation of the Merger and
the
other Transactions to which it is a party and compliance with and performance
of
the terms hereof and thereof will not, conflict with, or result in any violation
of or default (with or without notice or lapse of time, or both) under, or
give
rise to a right of termination, cancelation or acceleration of any obligation
or
to loss of a material benefit under, or to increased, additional, accelerated
or
guaranteed rights or entitlements of any person under, or result in the creation
of any Lien upon any of the properties or assets of Parent or any of its
subsidiaries under, any provision of (i) the charter or organizational
documents of Parent or any of its subsidiaries, (ii) subject to
effectiveness of the Parent Facility Amendments (as defined in Section 4.07)
as
contemplated by the Parent Consent Letter (as defined in Section 4.07), any
material Contract to which Parent or any of its subsidiaries is a party or
by
which any of their respective properties or assets is bound or
(iii) subject to the filings and other matters referred to in
Section 4.04(b), any material Judgment or material Law applicable to Parent
or any of its subsidiaries or their respective properties or assets, other
than,
in the case of clauses (ii) and (iii) above, any such items that, individually
or in the aggregate, have not had and would not be reasonably likely to have,
a
material adverse effect on Parent (a “Parent
Material Adverse Effect”)
(excluding for purposes of this Section 4.04(a) and the application of
Section 7.03(a) hereto, clause (a)(iii) of the definition “material adverse
effect”).
(b)
No
Consent
of, or registration, declaration or filing with, any Governmental Entity is
required to be obtained or made by or with respect to Parent or any of its
subsidiaries in connection with the execution, delivery and performance of
this
Agreement or any Transaction Agreement to which Parent or Acquisition Sub is
a
party or the consummation of the Transactions to which Parent or Acquisition
Sub
is a party or in connection with the execution and performance of the Parent
Voting Agreement, other than (i) compliance with and filings under
(A) the HSR Act, (B) the Japanese Anti-Monopoly Law, (C) other
Antitrust Laws, (D) the FEL, (E) the rules and regulations of the TSE,
(F) the JCL and (G) the CRL, (ii) the filing with the SEC of such
reports under the Exchange Act as may be required in connection with this
Agreement and the other Transaction Agreements, the Merger and the other
Transactions, (iii) the filing with the Bureau of the Japanese Information
Statement as may be required under the SEL in
31
connection
with the Parent Stock Purchase Agreement, the other Transaction Agreements,
the
Parent Stock Acquisition and the other Transactions, (iv) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware
and
appropriate documents with the relevant authorities of the other jurisdictions
in which the Company is qualified to do business, (v) compliance with and
such filings as may be required under applicable Environmental Laws,
(vi) such filings as may be required in connection with the taxes described
in Section 6.09, (vii) filings under any applicable state takeover Law
and (viii) such other items (A) required solely by reason of the
participation of the Company (as opposed to any third party) in the Transactions
or (B) that, individually or in the aggregate, have not had and would not
be reasonably likely to have a Parent Material Adverse Effect (excluding for
purposes of this Section 4.04(b) and the application of
Section 7.03(a) hereto, clause (a)(iii) of the definition “material adverse
effect”).
SECTION
4.05. Information
Supplied.
None of
the information supplied or to be supplied by Parent or Acquisition Sub for
inclusion or incorporation by reference in the Information Statement will
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 are made, not
misleading.
SECTION
4.06. Brokers.
No
broker, investment banker, financial advisor or other person, other than
Deutsche Bank Securities, Inc. and RHJI, the fees and expenses of which will
be
paid by Parent, is entitled to any broker’s, finder’s, financial advisor’s or
other similar fee or commission in connection with the Merger and the other
Transactions based upon arrangements made by or on behalf of
Parent.
SECTION
4.07. Financing. (a)
Parent
has
received and accepted (1) a commitment letter dated August 31, 2006 (the
“Commitment
Letter”),
from
the lenders party thereto (collectively, the “Lenders”)
relating to the commitment of the Lenders to provide the debt financing required
by the Company and its subsidiaries to effect the Refinancing and to pay related
fees and expenses of the Transactions, (2) a commitment letter dated August
28, 2006 (the “Parent
Commitment Letter”),
from
Aozora Bank, Ltd., (the “Aozora”)
relating to the commitment of Aozora to provide the bridge financing (the
“Bridge
Financing”)
required by Parent, the Company, the Principal Company Stockholders and the
holders of Company Preferred Stock to consummate the Merger, the Parent Stock
Acquisition and the Other Stock Acquisitions, (3) the commitment letter dated
August 29, 2006, from Aozora, on behalf of the lenders (the “Parent
Lenders”)
under
Parent's existing credit facility (the “Parent
Consent Letter”)
to
enter into a consent agreement confirming the approval by the Parent Lenders
of
certain amendments to Parent’s existing credit facility required thereunder by
Parent in connection with the Transactions and Refinancing (as defined below)
(the “Parent
Facility Amendments”)
and
(4) a commitment letter dated August 31, 2006 (the “Equity
Commitment”
and,
together with the Commitment Letter, Parent Commitment Letter
32
and
the
Parent Consent Letter, the “Commitments”)
between
RHJ International S.A. (“RHJI”),
and
Parent relating to the agreement of RHJI to provide the equity financing to
Parent specified therein (the “RHJI
equity financing”).
Parent
has provided or made available to the Company a true, correct and complete
copy
of each of the Commitments. The financing contemplated by the Commitment Letter,
the Parent Consent Letter and Parent Commitment Letter is referred to herein
as
the “Financing.”
(b)
Subject
to
its terms and conditions, the Financing and RHJI equity financing, when funded
in accordance with the applicable terms and conditions of the Commitment Letter,
Parent Commitment Letter, Parent Consent Letter and Equity Commitment, will
provide Acquisition Sub with funds at the Effective Time sufficient to (i)
consummate the Merger, (ii) finance the Consent Solicitations, (iii) refinance
the existing indebtedness of the Company and its subsidiaries described in
the
Commitment Letter (the “Refinancing”),
(iv)
provide the Bridge Financing and (v) pay related fees and expenses of the
Transactions.
SECTION
4.08. Section 203.
As of the
date of this Agreement, neither Parent nor Acquisition Sub nor any of their
“affiliates” or “associates” has been an “interested stockholder” of the Company
within the prior 3 years, as those terms are defined in Section 203 of
the DGCL.
ARTICLE
V
Covenants
Relating to Conduct of Business
SECTION
5.01. Conduct
of Business. (a)
Conduct
of Business by the Company.
Except
for matters set forth in the Company Disclosure Letter or otherwise expressly
permitted by this Agreement, from the date of this Agreement to the Effective
Time the Company shall, and shall cause each Company Subsidiary to, conduct
its
business in the usual, regular and ordinary course in substantially the same
manner as previously conducted and, to the extent consistent therewith, use
all
commercially reasonable efforts to preserve intact its current business
organization, keep available the services of its current officers and employees
and keep its relationships with customers, suppliers, licensors, licensees,
distributors and others having business dealings with them. In addition, and
without limiting the generality of the foregoing, except for matters set forth
in the Company Disclosure Letter or otherwise expressly permitted by this
Agreement, from the date of this Agreement to the Effective Time, the Company
shall not, and shall not permit any Company Subsidiary to, do any of the
following without the prior written consent of Parent:
(i)
(A)
declare, set aside, allot or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than the TM
Distribution or dividends and distributions by a direct or indirect wholly
owned
33
subsidiary
of the Company to its parent, (B) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock,
or
(C) purchase, redeem or otherwise acquire any shares of capital stock of
the Company or any Company Subsidiary or any other securities thereof or any
rights, warrants or options to acquire any such shares or other
securities;
(ii) issue,
deliver, sell or grant (A) any shares of its capital stock, (B) any
Voting Company Debt or other voting securities, (C) any securities
convertible into or exchangeable for, or any options, warrants or rights to
acquire, any such shares, Voting Company Debt, voting securities or convertible
or exchangeable securities or (D) any “phantom” stock, “phantom” stock
rights, stock appreciation rights, restricted stock units or stock-based
performance units, other than the issuance of Company Common Stock upon the
exercise of Company Stock Options or the vesting of Company RSUs outstanding
on
the date of this Agreement and in accordance with their present
terms;
(iii) amend
its
certificate of incorporation, by-laws or other comparable charter or
organizational documents.
(iv) acquire
or
agree to acquire (A) by merging or consolidating with, or by purchasing a
substantial equity interest in or substantial portion of the assets of, or
by
any other manner, any business or any corporation, partnership, joint venture,
association or other business organization or division thereof or (B) any
assets that are material, individually or in the aggregate, to the Company
and
the Company Subsidiaries, taken as a whole, except (I) purchases of inventory,
(II) new prepaid expenditures that in the aggregate, are not in excess of the
sum of (x) $10 million plus (y) the product of $2 million multiplied by the
number of full months between the date of this Agreement and the Closing Date
and (III) repairs, each of (I), (II) and (III) in the ordinary course of
business consistent with past practice and (IV) capital expenditures permitted
by Section 5.01(a)(ix);
(v) (A) grant
to any Participant any loan or increase in compensation, benefits or
perquisites, other than in individual cases to respond to competitive offers
of
employment to Participants (other than Covered Participants reasonably likely
to
earn aggregate base and bonus compensation in 2006 of $500,000 or more) in
the
ordinary course of business consistent with past practice, (B) grant to any
Participant any increase in severance, change in control, termination or similar
compensation or benefits, or pay any bonus to any Participant, in each case
except to the extent required under any Company Benefit Plan or Company Benefit
Agreement as in effect on the date hereof, (C) take any action to fund or
in any other way secure the payment of compensation or benefits under any
Company Benefit Plan or Company Benefit Agreement, (D) establish, adopt,
enter into, amend, modify or terminate any collective bargaining agreement
or
34
other
labor union Contract, Company Benefit Plan or Company Benefit Agreement,
(E) pay or provide to any Participant any benefit not provided for under a
Company Benefit Plan or Company Benefit Agreement as in effect on the date
hereof other than the payment of base compensation in the ordinary course of
business consistent with past practice and other than in individual cases to
respond to competitive offers of employment to Participants (other than Covered
Participants reasonably likely to earn aggregate base and bonus compensation
in
2006 of $500,000 or more) in the ordinary course of business, (F) grant any
awards under any Company Benefit Plan (including the grant of Company Stock
Options, Company RSUs or other stock-based or stock-related awards or the
removal or modification of existing restrictions in any Contract, Company
Benefit Plan or Company Benefit Agreement on awards made thereunder) or (G)
take
any action to accelerate any compensation or benefits, including vesting and
payment, or make any material determinations, under any collective bargaining
agreement, Company Benefit Plan or Company Benefit Agreement;
(vi) make
any
change in accounting methods, principles or practices materially affecting
the
reported consolidated assets, liabilities or results of operations of the
Company, except insofar as may have been required by a change in
GAAP;
(vii) sell,
lease (as lessor), license or otherwise dispose of or subject to any Lien any
properties or assets that are material, individually or in the aggregate, to
the
Company and the Company Subsidiaries, taken as a whole, except sales of
inventory and excess or obsolete assets in the ordinary course of business
consistent with past practice and the TM Distribution;
(viii)
(A) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or warrants
or
other rights to acquire any debt securities of the Company or any Company
Subsidiary, guarantee any debt securities of another person, enter into any
“keep well” or other agreement to maintain any financial statement condition of
another person or enter into any arrangement having the economic effect of
any
of the foregoing, except for short-term borrowings incurred in the ordinary
course of business consistent with past practice that can be repaid at Closing
without penalty or premium and except for (1) borrowings incurred in the
ordinary course of business consistent with past practice under the existing
equipment facility of the Company and the Company Subsidiaries and (2) capital
leases with respect to computer equipment and similar hardware and software
entered into in the ordinary course of business consistent with past practice,
in each case to the extent the related capital expenditure is permitted under
Section 5.01(a)(ix) or (B) make any loans, advances or capital
contributions to, or investments in, any other person, other than to or in
the
Company or any direct or indirect wholly owned Company Subsidiary;
35
(ix) make
or
agree to make any new capital expenditure or expenditures that in the aggregate,
are in excess of the sum of $20 million plus the product of
$5.0 million multiplied by the number of full months between the date of
this Agreement and the Closing Date;
(x) enter
into, modify, amend or terminate any Contract or waive, release or assign any
material rights or claims thereunder, which if so entered into, modified,
amended, terminated, waived, released or assigned would reasonably be likely
to
(A) adversely affect in any material respect the Company, (B) impair
in any material respect the ability of the Company to perform its obligations
under this Agreement or (C) prevent or materially delay the consummation of
the transactions contemplated by this Agreement;
(xi) except
as
required by GAAP, revalue any material assets of the Company or any of its
Subsidiaries or make any change in accounting methods, principles or
practices;
(xii) (A) pay,
discharge or satisfy any claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction, in the ordinary course of business consistent with
past practice or in accordance with their terms, of liabilities reflected or
reserved against in, or contemplated by, the most recent consolidated financial
statements (or the notes thereto) of the Company included in the Filed Company
SEC Documents or incurred in the ordinary course of business consistent with
past practice, (B) cancel any material indebtedness (individually or in the
aggregate) or waive any claims or rights of substantial value or (C) waive
the benefits of, or agree to modify in any manner, any confidentiality,
standstill or similar agreement to which the Company or any Company Subsidiary
is a party except for confidentiality agreements in the ordinary course of
business consistent with past practice;
(xiii) cancel
or
terminate any insurance policy or arrangement naming or providing for it as
a
beneficiary or a loss payable payee (unless such policy or arrangement is
canceled or terminated in the ordinary course of business and concurrently
replaced with a policy or arrangement with substantially similar coverage);
(xiv) make
or
change any material tax election; or
(xv) authorize
any of, or commit or agree to take any of, the foregoing actions.
(b)
Advice
of Changes.
The
Company shall promptly advise Parent orally and in writing of any change or
event that has or could be reasonably likely to have a Company Material Adverse
Effect.
36
(c)
Periodic
Reports.
In
connection with the continuing operation of the business of the Company and
the
Company Subsidiaries between the date of this Agreement and the Effective Time
and to the extent permitted by Antitrust Laws (as defined in Section 6.03(c)),
the Company shall use commercially reasonable efforts to report in good faith
on
a regular basis to the representatives of Parent regarding material operational
developments and the general status of ongoing operations pursuant to procedures
reasonably requested in writing by Parent or its representatives; provided
that the
consultation required by this Section 5.01(d) shall be conducted in a manner
so
as not to disrupt in any material respect the business of the Company and the
Company Subsidiaries; provided
further
that the Company and the Company Subsidiaries shall not report to Parent or
its
representatives any non-public information related to output, pricing or any
other competitively-sensitive matter. Parent and Sub acknowledge that neither
Parent nor Sub shall have any approval rights under this Section 5.01(d). The
Company acknowledges that any such reports shall not constitute a waiver by
either Parent or Sub of any rights it may have under this Agreement and that
neither Parent nor Sub shall have any liability or responsibility for any
actions of the Company, any Company Subsidiary or any of their respective
directors or officers with respect to matters that are the subject of such
reports. All information exchanged pursuant to this Section 5.01(c) shall be
subject to the Confidentiality Agreement (as defined in Section 6.02). For
the
avoidance of doubt, the Company shall not be required to provide any information
pursuant to this Section 5.01(c) to the extent such information is not required
to be provided pursuant to Section 6.02.
SECTION
5.02. No
Solicitation. (a)
The
Company shall not, nor shall it authorize or permit any Company Subsidiary
to,
nor shall it authorize or permit any officer, director or employee of, or any
investment banker, attorney or other advisor or representative (each, a
“Representative”
and
collectively, “Representatives”)
of, the
Company or any Company Subsidiary to, (i) directly or indirectly solicit,
initiate or encourage the submission of, any Company Takeover Proposal (as
defined in Section 5.02(e)), (ii) enter into any agreement with
respect to any Company Takeover Proposal or (iii) directly or indirectly
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Company Takeover Proposal; provided,
however,
that,
during the period prior to the Company Stockholder Approval, the Company and
its
Representatives may, to the extent required by the fiduciary obligations of
the
Company Board, as determined in good faith by a majority of the members thereof
after consultation with outside counsel, in response to a Superior Company
Proposal (as defined in Section 5.02(e)) or a Company Takeover Proposal
from a person that the Company Board determines, in good faith following
consultation with outside counsel, is reasonably capable of making a Superior
Company Proposal that, in each case, was not solicited by the Company after
December 21, 2005, and that did not otherwise result from a breach or a
deemed breach of this Section 5.02(a), and subject to compliance with
Section 5.02(c), (x) furnish information with respect to the Company
to the person
37
making
such Superior Company Proposal or Company Takeover Proposal and its
Representatives pursuant to a confidentiality agreement not less restrictive
of
the other party than the Confidentiality Agreement (as defined in Section 6.02)
and (y) participate in discussions and/or negotiations with such person and
its Representatives regarding any such Superior Company Proposal or Company
Takeover Proposal. Without limiting the foregoing, it is agreed that any
violation of the restrictions set forth in the preceding sentence by any
Representative or affiliate of the Company or any Company Subsidiary shall
be
deemed to be a breach of this Section 5.02(a) by the Company. Other than as
permitted by the proviso to the first sentence of this
Section 5.02(a),
the
Company shall, and shall cause its Representatives to, cease immediately all
discussions and negotiations regarding any proposal that constitutes, or may
reasonably be expected to lead to, a Company Takeover Proposal.
(b)
The
Company promptly shall advise Parent orally and in writing of any Company
Takeover Proposal or any inquiry with respect to or that could reasonably be
expected to lead to any Company Takeover Proposal and the identity of the person
making any such Company Takeover Proposal or inquiry including any change to
the
material details of any such Company Takeover Proposal or inquiry. The Company
shall (i) keep Parent fully informed of the status including any change to
the
material details of any such Company Takeover Proposal or inquiry and (ii)
provide to Parent as soon as practicable after receipt or delivery thereof
with
copies of all material correspondence and other written material sent or
provided to the Company from any third party in connection with any Company
Takeover Proposal or sent or provided by the Company to any third party in
connection with any Company Takeover Proposal.
(c)
Nothing
contained in this Section 5.02 shall prohibit the Company from taking and
disclosing to its stockholders a position contemplated by Rule 14d-9 or
14e-2 promulgated under the Exchange Act or from making any required disclosure
to the Company’s stockholders if, in the good faith judgment of the Company
Board, after consultation with outside counsel, failure so to disclose would
be
inconsistent with its obligations under applicable Law.
(d)
For
purposes of this Agreement:
“Company
Takeover Proposal”
means
(i) any proposal or offer for a merger, consolidation, dissolution,
recapitalization or other business combination involving the Company,
(ii) any proposal for the issuance by the Company of over 20% of its equity
securities as consideration for the assets or securities of another person
or
(iii) any proposal or offer to acquire in any manner, directly or
indirectly, over 20% of the equity securities or consolidated total assets
of
the Company, in each case other than the Transactions. For the avoidance of
doubt, the TM Distribution and all proposals related thereto shall not be deemed
to be a Company Takeover Proposal.
38
“Superior
Company Proposal”
means
any proposal made by a third party to acquire 50% or more of the equity
securities or consolidated assets of the Company, pursuant to a tender or
exchange offer, a merger, a consolidation, a liquidation or dissolution, a
recapitalization, a sale of its assets or otherwise, (i) on terms which a
majority of the members of the Company Board determines in good faith to be
more
favorable to the holders of Company Common Stock than the Merger, taking into
account all the terms and conditions of such proposal and this Agreement and
(ii) that is reasonably capable of being completed, taking into account all
financial, regulatory, legal and other aspects of such proposal; provided
that the
Company Board shall not so determine that any such proposal is a Superior
Company Proposal until the Company has complied in all material respects with
Section 5.02(b) with respect to such proposal. For the avoidance of doubt,
the
TM Distribution and all proposals related thereto shall not be deemed to be
a
Superior Company Proposal.
ARTICLE
VI
Additional
Agreements
SECTION
6.01. Preparation
of Information Statement; Action by Written Consent. (a)
The
Company shall, as soon as practicable following the date of this Agreement,
prepare and file with the SEC the Information Statement (including all
information required by Rule 13e-3 promulgated under the Exchange Act) in
preliminary form, and each of the Company and Parent shall use its commercially
reasonable efforts to respond as promptly as practicable to any comments of
the
SEC with respect thereto. The Company shall notify Parent promptly of the
receipt of any comments from the SEC or its staff and of any request by the
SEC
or its staff for amendments or supplements to the Information Statement or
on
any other Company Disclosure Document or for additional information and shall
supply Parent with copies of all correspondence between the Company or any
of
its representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Information Statement or any other Company Disclosure
Document. If at any time prior to the Effective Time there shall occur any
event
that should be set forth in an amendment or supplement to the Information
Statement, the Company shall promptly prepare and mail to its stockholders
such
an amendment or supplement. The Company shall not mail any Information
Statement, or any amendment or supplement thereto, to which Parent reasonably
objects. The Company shall use its commercially reasonable efforts to cause
the
Information Statement to be mailed to the Company’s stockholders as promptly as
practicable after filing with the SEC. Notwithstanding the foregoing, prior
to
filing or mailing the Information Statement or any other Company Disclosure
Document (or any amendment or supplement thereto) or responding to any comments
of the SEC with respect thereto, the Company (i) shall provide Parent an
opportunity to review and comment on such
39
document
or response and (ii) shall include in such document or response all reasonable
comments proposed by Parent.
(b)
Parent
shall, promptly following the date of this Agreement, seek the Company
Stockholder Approval by the written consent of the holders of a majority of
the
outstanding Company Common Stock. The Company shall, through the Company Board,
recommend to its stockholders that they give the Company Stockholder Approval,
except to the extent that the Company Board shall have withdrawn or modified
its
approval or recommendation of this Agreement or the Merger after the Company
Board shall have determined in good faith, after consultation with outside
counsel, that the failure to do so would be inconsistent with its obligations
under applicable Law.
SECTION
6.02. Access
to Information; Confidentiality.
Each of
the Company and Parent shall, and shall cause each of their subsidiaries to,
afford to the other party, and to the other party’s officers, employees,
accountants, counsel, financial advisors and other representatives, affiliates
and sources and potential sources of financing (and representatives of each
of
the foregoing), reasonable access during normal business hours during the period
prior to the Effective Time (as long as such access is not unreasonably
disruptive to the business of such party or its subsidiaries) to all their
respective properties, books, contracts, commitments, personnel and records
and,
during such period, each of the Company and Parent shall, and shall cause each
of its subsidiaries to, furnish promptly to the other party (a) a copy of
each report, schedule, registration statement and other document filed by it
during such period pursuant to the requirements of Federal or state securities
laws and (b) all other information concerning its business, properties and
personnel as the other party may reasonably request; provided,
however,
that
either party may withhold (i) any document or information that is subject
to the terms of a confidentiality agreement with a third party, (ii) such
portions of documents or information relating to output, pricing or other
matters that are highly sensitive if the exchange of such documents (or portions
thereof) or information, as determined by such party’s counsel, would reasonably
be expected to raise antitrust concerns for such party (or any of its
affiliates) or (iii) such portions of documents or information that would
reasonably be expected to jeopardize any attorney-client privilege or contravene
any Law or fiduciary duty (provided that each party shall in good faith seek
and
implement a reasonable alternative to provide the other party’s counsel with
access to such document or information). All information exchanged pursuant
to
this Section 6.02 shall be subject to the confidentiality agreement dated
September 29, 2005, between the Company and RHJI (the “Confidentiality
Agreement”).
SECTION
6.03. Commercially
Reasonable Efforts; Notification. (a)
Upon
the
terms and subject to the conditions set forth in this Agreement, each of the
parties shall use its commercially reasonable efforts to take, or cause to
be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable
to
consummate and make effective, in the most expeditious manner practicable,
the
Merger and the other Transactions,
40
including
(i) the obtaining of all necessary actions or nonactions, waivers, consents
and approvals from Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities, if
any)
and the taking of all reasonable steps as may be necessary to obtain an approval
or waiver from, or to avoid an action or proceeding by, any Governmental Entity,
(ii) the obtaining of all necessary consents, approvals or waivers from
third parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement
or
any other Transaction Agreement or the consummation of the Transactions,
including seeking to have any stay or temporary restraining order entered by
any
court or other Governmental Entity vacated or reversed and (iv) the
execution and delivery of any additional instruments necessary to consummate
the
Transactions and to fully carry out the purposes of the Transaction Agreements.
Without limiting the generality of the foregoing, the parties hereto acknowledge
that it is the intention of each of the parties hereto that the TM Distribution
(including obtaining all necessary third party consents and approvals with
respect thereto, including as required under any securities laws) shall become
payable immediately following the Effective Time to Company common stockholders
of record one business day prior to the Closing Date and each party hereto
shall
use its commercially reasonable efforts to achieve the same. In connection
with
and without limiting the foregoing, the Company and the Company Board shall
(i)
take all action necessary to ensure that the TM Distribution is paid on terms
and conditions consistent with the TM Distribution Conditions and the terms
set
forth in Exhibit B, (ii) take all action necessary to ensure that no state
takeover statute or similar statute or regulation is or becomes applicable
to
any Transaction or this Agreement or any other Transaction Agreement, and
(iii) if any state takeover statute or similar statute or regulation
becomes applicable to this Agreement or any other Transaction Agreement, take
all action necessary to ensure that the Merger and the other Transactions may
be
consummated as promptly as practicable on the terms contemplated by this
Agreement and the Transaction Agreements and otherwise to minimize the effect
of
such statute or regulation on the Merger and the other Transactions. Nothing
in
this Agreement shall be deemed to require any party to waive any substantial
rights or agree to any substantial limitation on its operations or to dispose
of
any significant asset or collection of assets. Notwithstanding the foregoing,
the Company and its Representatives shall not be prohibited under this
Section 6.03(a) from taking any action permitted by Section 5.02(b).
Subject to applicable Law relating to the exchange of information, the Company
and Parent and their respective counsel shall have the right to review in
advance, and to the extent practicable each shall consult the other on, any
filing made with, or written materials submitted to, any Governmental Entity
in
connection with the Merger and the other Transactions. The Company and Parent
shall provide the other party and its counsel with the opportunity to
participate in any meeting with any Governmental Entity in respect of any
filing, investigation or other inquiry in connection with the Merger or the
other Transactions.
(b)
The
Company shall give prompt notice to Parent, and Parent or Acquisition Sub shall
give prompt notice to the Company, of (i) any representation or
41
warranty
made by it contained in this Agreement or any Transaction Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or
any
such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with
or satisfy in any material respect any covenant, condition or agreement to
be
complied with or satisfied by it under this Agreement; provided,
however,
that no
such notification shall be deemed to be a waiver or cure of any such breach
or
failure to comply or affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement or the Transaction Agreements.
(c)
Nothing
in
Section 6.03(a) shall require Parent to dispose of any of its assets or to
limit its freedom of action with respect to any of its businesses, or to consent
to any disposition of the Company’s assets or limits on the Company’s freedom of
action with respect to any of its businesses, or to commit or agree to any
of
the foregoing, and nothing in Section 6.03(a) shall authorize the Company
to commit or agree to any of the foregoing, to obtain any consents, approvals,
permits or authorizations to remove any impediments to the Merger relating
to
the HSR Act, the Japanese Anti-Monopoly law or other antitrust, competition
or
premerger notification, trade regulation law, regulation or order (“Antitrust
Laws”)
or to
avoid the entry of, or to effect the dissolution of, any injunction, temporary
restraining order or other order in any suit or proceeding relating to Antitrust
Laws.
(d)
Nothing
in
this Section 6.03 shall require Parent to (i) consent to any action or
omission by the Company that would be inconsistent with Section 5.01 absent
such consent or (ii) agree to amend or waive any provision of this
Agreement.
(e)
As
soon as
reasonably practicable following the execution of this Agreement, Parent, in
its
capacity as the sole stockholder of Sub, shall adopt this
Agreement.
SECTION
6.04. Stock
Options and Restricted Stock Units. (a)
As
soon as
practicable following the date of this Agreement, the Company Board (or, if
appropriate, any committee administering the Company Stock Plan) shall adopt
such resolutions or take such other actions as are required to adjust the terms
of each outstanding Company Stock Option, whether vested or unvested, to provide
that each such Company Stock Option shall be rolled over at the Effective Time
by canceling such Company Stock Option in exchange for a cash payment by the
Company of an amount equal to (A) the excess, if any, of (1) the Common
Merger Consideration over (2) the exercise price per share of Company
Common Stock subject to such Company Stock Option (adjusted to reflect the
TM
Distribution), multiplied by (B) the number of shares of Company Common
Stock that are subject to such Company Stock Option immediately prior to the
Effective Time and for which such Company Stock Option shall not theretofore
have been exercised. Parent will make available options on its common stock
to
employees of the Company set forth on Section 6.04(a) of the Parent Disclosure
42
Letter
(as
it may be supplemented by Parent prior to the Effective Time), on the terms
and
conditions provided therein.
(b)
As
soon as
practicable following the date of this Agreement, the Company Board (or, if
appropriate, any committee administering the Company Stock Plan) shall adopt
such resolutions or take such other actions as are required to adjust the terms
of all outstanding Company RSUs heretofore granted under the Company Stock
Plan,
whether vested or unvested, to provide that each such Company RSU shall be
canceled at the Effective Time in exchange for a cash payment by the Company
of
an amount equal to (i) (A) if the holder of such Company RSU is a Principal
Company Stockholder, $2.40 or (B) if the holder of such Company RSU is not
a
Principal Company Stockholder, the Common Merger Consideration multiplied by
(ii) the number of shares of Company Common Stock that are subject to such
Company RSU for which such Company RSU shall not theretofore have been
settled.
(c)
All
amounts payable pursuant to this Section 6.04 shall be subject to any
required withholding of Taxes (with amounts so withheld and paid over to the
appropriate taxing authority being treated for all purposes of this Agreement
as
having been paid to the applicable holders) and shall be paid without
interest.
(d)
The
Company Stock Plan shall terminate as of the Effective Time, and the provisions
in any other Company Benefit Plan providing for the issuance, transfer or grant
of any capital stock of the Company or any interest in respect of any capital
stock of the Company shall be deleted as of the Effective Time, and the Company
shall ensure that following the Effective Time no holder of a Company Stock
Option or Company RSU or any Participant shall have any right thereunder to
acquire any capital stock of the Company or the Surviving Corporation or any
other equity interest therein.
(e)
In
this
Agreement:
“Company
Stock Option”
means
any option to purchase Company Common Stock granted under the Company Stock
Plan.
“Company
RSU”
means
any restricted stock unit granted under any Company Stock Plan.
“Company
Stock Plan”
means
the 2001 Long Term Equity Incentive Plan.
SECTION
6.05. Benefit
Plans. (a)
For
one
year following the Effective Time, Parent either (i) shall
maintain or cause the Surviving Corporation to maintain the Company Benefit
Plans (other than plans providing for the issuance of Company Common Stock
or
based on the value of Company Common Stock) at the benefit levels in effect
on
the date of this Agreement or (ii) shall provide or cause the Surviving
Corporation to provide benefits (other than benefits under plans providing
for
the issuance of Company Capital Stock or based on the value of Company Capital
Stock) to
43
employees
of the Company and the Company Subsidiaries that, taken as a whole, are not
materially less favorable in the aggregate to such employees than those provided
to such employees as of the date of this Agreement. Nothing herein shall be
construed to prohibit Parent or the Surviving Corporation from amending or
terminating such Company Benefit Plans in accordance with their terms and with
applicable Law, so long as Parent is in compliance with the other terms of
this
Section 6.05(a).
(b)
The
service of each employee of the Company and the Company Subsidiaries prior
to
the Effective Time shall be treated as service with Parent or any of its
subsidiaries for purposes of each employee benefit plan of Parent or any of
its
subsidiaries in which such employee is eligible to participate after the
Effective Time, including for purposes of eligibility, vesting, benefit levels
and accruals (but not for purposes of benefit accrual under any defined benefit
pension plans); provided,
however,
that
such service shall not be recognized to the extent that such recognition would
result in any duplication of benefits.
(c)
Parent
shall waive, or cause to be waived, any pre-existing condition limitation under
any welfare benefit plan maintained by Parent or any of its affiliates (other
than the Company and Company Subsidiaries) in which employees of the Company
and
the Company Subsidiaries (and their eligible dependents) will be eligible to
participate from and after the Effective Time, except to the extent that such
pre-existing condition limitation would have been applicable under the
comparable Company Benefit Plan immediately prior to the Effective Time. Parent
shall recognize, or cause to be recognized, the dollar amount of all expenses
incurred by each employee of the Company and the Company Subsidiaries (and
his
or her eligible dependents) during the calendar year in which the Effective
Time
occurs for purposes of satisfying such year’s deductible and co-payment
limitations under the relevant welfare benefit plans in which they will be
eligible to participate from and after the Effective Time.
(d)
The
provisions of this Section 6.05 are not intended to confer upon any person
other than the parties any rights or remedies.
SECTION
6.06. Indemnification. (a)
Parent
shall cause to be maintained for a period of not less than six years from the
Effective Time the Company’s current directors’ and officers’ insurance and
indemnification policy to the extent that it provides coverage for events
occurring prior to the Effective Time (the “D&O
Insurance”)
for all
persons who are directors and officers of the Company on the date of this
Agreement, so long as the annual premium therefor would not be in excess of
150%
of the last annual premium paid prior to the date of this Agreement (such 150%
amount, the “Maximum
Premium”).
If the
existing D&O Insurance expires, is terminated or canceled during such
six-year period, Parent shall use all commercially reasonable efforts to cause
to be obtained as much D&O Insurance as can be obtained for the remainder of
such period for an annualized premium not in excess of the Maximum Premium,
on
terms and conditions no less advantageous than the existing
44
D&O
Insurance. In lieu of continuing the existing D&O Insurance, (i) Parent
may obtain after the Effective Time a “tail” D&O Insurance policy on terms
and conditions no less advantageous than the existing D&O Insurance for a
period of six years from the Effective Time; provided
that the
annualized premium shall not exceed the Maximum Premium and (ii) the
Company may obtain prior to the Effective Time a “tail” D&O Insurance policy
in an amount and on terms and conditions no more advantageous than the existing
D&O Insurance for a period of six years from the Effective Time;
provided
that the
lump sum premium shall not exceed $962,000. The Company represents to Parent
that the Maximum Premium is $650,000.
(b)
Parent
shall, to the fullest extent permitted by Law, cause the Surviving Corporation
to honor all the Company’s obligations to indemnify or hold harmless (including
any obligations to advance funds for expenses) the current or former directors
or officers of the Company for acts or omissions by such directors and officers
occurring prior to the Effective Time to the extent that such obligations of
the
Company exist on the date of this Agreement, whether pursuant to the Company
Charter, the Company By-laws, individual indemnity agreements or otherwise,
and
such obligations shall survive the Merger and shall continue in full force
and
effect in accordance with the terms of the Company Charter, the Company By-laws
and such individual indemnity agreements from the Effective Time until the
expiration of the applicable statute of limitations with respect to any claims
against such directors or officers arising out of such acts or omissions. Parent
shall, to the fullest extent permitted by Law, cause the Surviving Corporation
to advance funds for expenses incurred by a director or officer in defending
a
civil or criminal action, suit or proceeding relating to the indemnification
obligations referenced in the immediately preceding sentence in advance of
the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount
if
it shall be ultimately determined that he or she is not entitled to the
indemnification referenced in the immediately preceding sentence.
SECTION
6.07. Fees
and Expenses.
Except
as provided below, all fees and expenses incurred in connection with the Merger
and the other Transactions shall be paid by the party incurring such fees or
expenses, whether or not the Merger is consummated.
SECTION
6.08. Public
Announcements.
Parent
and Acquisition Sub, on the one hand, and the Company, on the other hand, shall
consult with each other before issuing, and provide each other the opportunity
to review and comment upon, any press release or other public statements with
respect to the Merger and the other Transactions and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by applicable Law, court process or by obligations
pursuant to any listing agreement with any national securities
exchange.
45
SECTION
6.09. Transfer
Taxes.
All stock
transfer, real estate transfer, documentary, stamp, recording and other similar
Taxes (including interest, penalties and additions to any such Taxes)
(“Transfer
Taxes”)
incurred in connection with the Transactions shall be paid by either Acquisition
Sub or the Surviving Corporation, and the Company shall cooperate with
Acquisition Sub and Parent in preparing, executing and filing any Tax Returns
with respect to such Transfer Taxes.
SECTION
6.10. Stockholder
Litigation.
The
Company shall give Parent the opportunity to participate in the defense or
settlement of any stockholder litigation against the Company and its directors
relating to any Transaction; provided,
however,
that no
such settlement shall be agreed to without Parent’s consent, which shall not be
unreasonably withheld, delayed or conditioned.
SECTION
6.11. Financing;
Consent Solicitations. (a)
Financing.
Parent
and Acquisition Sub shall use their commercially reasonable efforts to obtain
the proceeds of the Financing on the terms and conditions described in the
Commitment Letter, Parent Consent Letter and Parent Commitment Letter and to
obtain the funds contemplated by the Equity Commitment (and to contribute such
funds to the Company), including using commercially reasonable efforts to (A)
negotiate definitive agreements with respect to the Financing consistent with
the terms and conditions contained in the Commitment Letter and (B) satisfy
on a
timely basis all conditions in such definitive agreements the satisfaction
of
which is within the control of Parent or Acquisition Sub. Parent and Acquisition
Sub shall use their commercially reasonable efforts to comply with their
respective obligations, and enforce their respective rights, under the
Commitment Letter, the Parent Consent Letter and Parent Commitment Letter and
shall cause RHJI to comply with its obligations under the Equity Commitment.
Parent shall keep the Company informed on a reasonably current basis in
reasonable detail of the status of its efforts to obtain the proceeds of the
Financing and shall not permit any amendment or modification to, or any waiver
of any material provision or remedy under, any of the Commitment Letter, the
Parent Consent Letter, Parent Commitment Letter or the Equity Commitment if
such
amendment, modification, waiver or remedy amends the conditions to the drawdown
of the Financing in a manner adverse to the interests of the Company and its
shareholders, in each case, in any material respect or would adversely affect
in
any material respect the ability of Parent or the Company to effect the
Financing or obtain the proceeds of the Equity Commitment. The Company shall
also use commercially reasonable efforts to assist and cooperate with Parent
and
Acquisition Sub in connection with their efforts to obtain the proceeds of
the
Financing, including providing reasonably required information relating to
the
Company and the Company Subsidiaries to the financial institution or
institutions providing the Financing and executing and delivering, and causing
the Company Subsidiaries to execute and deliver, customary certificates, legal
opinions (which may be reasoned, if counsel reasonably believes it cannot give
the opinion otherwise) or other documents and instruments relating to
guarantees, the pledge of collateral and other matters ancillary to the
Financing as may be reasonably requested by Parent in connection with the
Financing;
46
provided,
however,
that no
obligation of the Company or any Company Subsidiary under any such certificate,
document or instrument shall be effective until the Effective Time and none
of
the Company or any Company Subsidiary shall be required to pay any commitment
or
other similar fee or incur any other liability in connection with the Financing
prior to the Effective Time. In the event that the Financing is not available
to
consummate the Refinancing and pay related fees and expenses of the Transactions
contemplated by this Agreement and the other Transaction Agreements, then Parent
shall promptly notify the Company and Parent and Acquisition Sub shall use
their
commercially reasonable efforts to obtain alternative financing on terms that
are no less favorable to Parent and Acquisition Sub than those set forth in
the
Commitment Letter, Parent Consent Letter or Parent Commitment Letter, as
applicable, and in the same amounts as contemplated by the Commitment Letter
(including for working capital purposes following the Closing) or Parent
Commitment Letter, as applicable (the “Alternative
Financing”);
provided
that no
such Alternative Financing shall require a greater cash equity commitment than
that contemplated by the Equity Commitment.
(b)
Consent
Solicitations.
As soon
as practicable following the execution and delivery of this Agreement the
Company shall commence the Consent Solicitations with respect to all of its
11%
Senior Subordinated Notes, 10% Senior Subordinated Notes and 10% Senior Notes
whereby the Company shall (i) seek to effect a tender offer of the Tender Notes
and (ii) solicit the consents of the holders of the Notes regarding amendments
to the covenants contained in the respective Notes Indentures (the “Indenture
Amendments”),
in
each case contemplated by Schedule 6.11(b) hereto. In accordance with the
terms of the Consent Solicitations, (i) assuming the conditions to the tender
offer therein are satisfied, and in connection with the consummation of the
Transactions, the Company will accept the tendered Notes for payment and (ii)
assuming the requisite consents are received, the Company shall execute
supplemental indentures to each of the Notes Indentures among the Company,
the
guarantors named therein and the trustee party thereto reflecting the Indenture
Amendments, which supplemental indentures shall become operative concurrently
with the Effective Time, and shall use its commercially reasonable efforts
to
cause the trustees under the Indentures to promptly enter into such supplemental
indentures as applicable. Parent and the Company each shall use its commercially
reasonable efforts to proceed with and complete the Consent Solicitations as
required to satisfy the condition precedents in Section 7.01(e) and
Section 7.02(f) and shall consult and cooperate with each other in all such
efforts; provided
that
(i) Parent shall have the sole right to control decisions with respect to
the strategy and conduct of the Consent Solicitations (including modifying
the
terms and structure thereof as set forth on Schedule 6.11(b) hereto) and
(ii) the consent of the Company shall be required to modify or waive
material terms or conditions of the Consent Solicitations if such would be
reasonably likely to materially and adversely impact the probability of a
successful outcome for the Consent Solicitations or would conflict with the
provisions of any Transaction Agreement and documents delivered in connection
with the foregoing. Promptly following the date of this Agreement, the Company
shall prepare and mail the documentation to be sent to the holders of the Notes
47
in
connection with the Consent Solicitations, but only after receipt of approval
from Parent (which approval shall not be unreasonably withheld, delayed or
conditioned). The Company shall provide, shall cause the Company Subsidiaries
to
provide, and shall use its commercially reasonable efforts to cause their
respective Representatives to provide, all cooperation requested by Parent
in
connection with the Consent Solicitations including assisting in the preparation
and execution of all documents required in connection therewith. All
documentation for the Consent Solicitations will be customary for transactions
of this nature and shall be in form and substance reasonably satisfactory to
Parent and the Company. The Consent Solicitations and other actions taken in
connection therewith shall be conducted in accordance with the terms of the
applicable Indentures and all applicable rules and regulations of the SEC and
other applicable Laws. If at any time prior to the Effective Time any
information relating to the Company or any Company Subsidiary or any of their
affiliates, officers or directors, should be discovered by the Company, Parent
or Acquisition Sub which if not set forth in an amendment or supplement to
the
documents mailed to Note holders in respect of the Consent Solicitations would
reasonably be expected to cause such documents to include any misstatement
of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the party which discovers such information shall promptly notify
the other parties hereto and, to the extent required by law, rules or
regulations, an appropriate amendment or supplement describing such information
shall promptly by prepared and, if required, filed with the SEC and/or
disseminated to the holders of Notes.
ARTICLE
VII
Conditions
Precedent
SECTION
7.01. Conditions
to Each Party’s Obligation To Effect The Merger.
The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a)
Stockholder
Approval.
The
Company shall have obtained the Company Stockholder Approval and not less than
20 days prior to the Closing Date shall have sent or given to each holder
of the Company Common Stock the Information Statement in compliance with
Rule 14c-2 promulgated under the Exchange Act and shall have complied with
Rule 13e-3 promulgated under the Exchange Act.
(b)
Antitrust.
Any
waiting period (and any extension thereof) applicable to the Merger under the
HSR Act shall have been terminated or shall have expired. Any consents,
approvals and filings under any foreign Antitrust Law, the absence of which
would prohibit the consummation of the Merger or would be reasonably likely
to
have a Parent Material Adverse Effect, shall have been obtained or
made.
48
(c)
No
Injunctions or Restraints.
No
temporary judgment issued by any court of competent jurisdiction or other law
preventing the consummation of the Merger shall be in effect; provided,
however,
that
prior to asserting this condition, subject to Section 6.03, the applicable
party shall have used its commercially reasonable efforts to prevent the entry
of any such injunction or other order and to appeal as promptly as possible
any
such judgment that may be entered.
(d)
Parent
Stock Purchase Agreement.
Parent
and Principal Company Stockholders shall have consummated the transactions
contemplated by the Parent Stock Purchase Agreement without the amendment,
modification or waiver in any material respect of any material term or condition
thereof.
(e)
Consent
Solicitations.
The
Company shall have completed the Consent Solicitations and shall have received
consent from holders of a majority of the outstanding Notes of each series
consenting to the Transactions and the TM Distribution; provided,
however,
that
prior to asserting this condition, the applicable party shall have complied
in
all material respects with its obligations under Section 6.11.
(f)
Financing.
Parent
and Acquisition Sub shall have obtained the proceeds contemplated by the
Financing or the Alternative Financing; provided,
however,
that
prior to asserting this condition, the applicable party shall have complied
in
all material respects with its obligations under Section 6.11.
(g)
Other
Stock Purchase Agreements.
The
transactions contemplated by the Other Stock Purchase Agreements shall have
been
consummated without the amendment, modification or waiver in any material
respect of any material term or condition thereof.
SECTION
7.02. Conditions
to Obligations of Parent and Acquisition Sub.
The
obligations of Parent and Acquisition Sub to effect the Merger are further
subject to the following conditions:
(a)
Representations
and Warranties.
The
representations and warranties of the Company in this Agreement (other than
those set forth in Sections 3.01, 3.03, 3.04 and 3.18(a)) shall be true and
correct, as of the date of this Agreement and as of the Closing Date as though
made on the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct, on and as of such
earlier date), other than for such failures to be true and correct that,
individually or in the aggregate, have not had and would not be reasonably
likely to have a Company Material Adverse Effect (it being agreed that for
purposes of determining whether such representations and warranties shall be
true and correct and applying the foregoing Company Material Adverse Effect
qualifier, all such representations and warranties that already are qualified
by
reference to a Company Material Adverse Effect or other materiality qualifier
shall be deemed to be not so qualified). The representations and warranties
of
the Company set
49
forth
in
Sections 3.01, 3.03, 3.04 and 3.18(a) that are qualified by a Company
Material Adverse Effect or other materiality qualifier shall be true and
correct, and those not so qualified shall be true and correct in all material
respects, as of the date of this Agreement and as of the Closing Date as though
made on the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct, or true and correct
in
all material respects, as applicable, on and as of such earlier date). Parent
shall have received a certificate signed on behalf of the Company by the chief
executive officer and the chief financial officer of the Company to such
effect.
(b)
Performance
of Obligations of the Company.
The
Company shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing Date,
and
Parent shall have received a certificate signed on behalf of the Company by
the
chief executive officer and the chief financial officer of the Company to such
effect.
(c)
Absence
of Company Material Adverse Effect.
Since the
date of this Agreement, there shall not have been any event, change, effect,
development or state of facts that, individually or in the aggregate, has had
or
would be reasonably likely to have a Company Material Adverse
Effect.
(d)
Minimum
Tender.
At least
$225 million aggregate principal amount of the Company’s Tender Notes shall
have been validly tendered (and not validly withdrawn) to the Company in
connection with the Consent Solicitations (excluding Tender Notes owned by
Mercury or any of its affiliates); provided,
however,
that
prior to asserting this condition, each of Parent and Acquisition Sub shall
have
complied in all material respects with its obligations under Section 6.11.
(e)
Parent
Lender Consent.
The
Parent Facility Amendments shall have become effective on the terms and
conditions contemplated in the Parent Consent Letter.
(f)
TM
Distribution.
If the TM
Distribution shall be paid, it shall be payable only on terms consistent in
all
material respects with the TM Distribution Conditions and the terms set forth
in
Exhibit B.
(g)
280G.
The
Company
shall
have taken all steps necessary in compliance with Section 280G(b)(5) of the
Code
and
the Treasury Regulations promulgated thereunder, including providing adequate
disclosure to shareholders (within the meaning of Section 280G(b)(5)(B)(ii)
of the Code and the Treasury Regulations promulgated thereunder) and conducting
a vote of all shareholders (within the meaning of Treasury Regulation
Section 1.280G-1, Q/A-7(b)), (the “280G
Approval”)
so that
in the event the shareholder approval requirements of
Section 280G(b)(5)(B)(i) of the Code are met in connection with such
shareholder vote, no Potential Parachute Payment would be treated as an “excess
parachute payment” (as defined in Section 280G(b) of the Code),
50
without
regard to whether or not such shareholder approval requirements are actually
met
in connection with such shareholder vote.
(h)
Corporate
Rating and Term Facility Pricing.
The
corporate ratings of the Company (as such term is used in the Commitment Letter)
shall be at least B3 by ▇▇▇▇▇’▇ Investors Service, Inc. and at least B- by
Standard & Poor’s Ratings Group (in each case with at least stable outlook),
assuming consummation of the Transactions, or the Applicable Margin (as defined
in the Commitment Letter) on Eurodollar Loans (as defined in the Commitment
Letter) under the Term Facility (as defined in the Commitment Letter) shall
be
less than or equal to 4.5%.
SECTION
7.03. Condition
to Obligation of the Company.
The
obligation of the Company to effect the Merger is further subject to the
following conditions:
(a)
Representations
and Warranties.
The
representations and warranties of Parent and Acquisition Sub in this Agreement
shall be true and correct in all material respects, as of the date of this
Agreement and as of the Closing Date as though made on the Closing Date, except
to the extent such representations and warranties expressly relate to an earlier
date (in which case such representations and warranties shall be true and
correct in all material respects, on and as of such earlier date) and the
Company shall have received a certificate signed on behalf of Parent and
Acquisition Sub to such effect.
(b)
Performance
of Obligations of Parent and Acquisition Sub.
Parent
and Acquisition Sub shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or prior
to
the Closing Date, and the Company shall have received a certificate signed
on
behalf of Parent by an executive officer of Parent to such effect.
(c)
TM
Distribution.
The TM
Distribution shall be payable on terms consistent in all material respects
with
the TM Distribution Conditions and the terms set forth in Exhibit B;
provided,
however,
that
prior to the Company asserting this condition, the Company shall have complied
in all material respects with its obligations under Section 6.03.
ARTICLE
VIII
Termination,
Amendment and Waiver
SECTION
8.01. Termination.
This
Agreement may be terminated at any time prior to the Effective Time, whether
before or after receipt of Company Stockholder Approval:
51
(a) by
mutual
written consent of Parent, Acquisition Sub and the Company;
(b) by
either
Parent or the Company:
(i) if
the
Merger is not consummated on or before March 1, 2007 (the “Outside
Date”),
unless
the failure to consummate the Merger is the result of a willful and material
breach of this Agreement by the party seeking to terminate this Agreement;
provided,
however,
that the
passage of such period shall be tolled for any part thereof during which any
party shall be subject to a nonfinal order, decree, ruling or action
restraining, enjoining or otherwise prohibiting the consummation of the
Merger;
(ii) if
any
Governmental Entity issues an order, decree or ruling or takes any other action
permanently enjoining, restraining or otherwise prohibiting the Merger and
such
order, decree, ruling or other action shall have become final and nonappealable;
(iii) if
the
Company Stockholder Approval is not validly obtained on or prior to
September 7, 2006; or
(iv) if
the
Parent Stock Purchase Agreement is terminated in accordance with its
terms;
(c) by
Parent,
if the Company breaches or fails to perform in any material respect any of
its
representations, warranties or covenants contained in any Transaction Agreement,
which breach or failure to perform (i) would give rise to the failure of a
condition set forth in Section 7.02(a) or 7.02(b), and (ii) cannot be
or has not been cured by the Outside Date (provided that Parent is not then
in
willful and material breach of any representation, warranty or covenant
contained in this Agreement);
(d) by
the
Company prior to the receipt of the Company Stockholder Approval in accordance
with Section 8.05(b); provided,
however,
that the
Company shall have complied with all provisions thereof, including the notice
provisions therein; or
(e) by
the
Company, if Parent or Acquisition Sub breaches or fails to perform in any
material respect any of its representations, warranties or covenants contained
in this Agreement, which breach or failure to perform (i) would give rise to
the
failure of a condition set forth in Section 7.03(a) or 7.03(b), and (ii) cannot
be or has not been cured by the Outside Date (provided that the Company is
not
then in willful and material breach of any representation, warranty or covenant
contained in this Agreement).
52
SECTION
8.02. Effect
of Termination.
In the
event of termination of this Agreement by either the Company or Parent as
provided in Section 8.01, this Agreement shall forthwith become void and
have no effect, without any liability or obligation on the part of Parent,
Acquisition Sub or the Company, other than Section 3.20, Section 4.06,
the last sentence of Section 6.02, Section 6.07, this
Section 8.02 and Article IX, which provisions shall survive such
termination, and except to the extent that such termination results from the
willful and material breach by a party of any representation, warranty or
covenant set forth in this Agreement, in which case the aggrieved party shall
be
entitled to all remedies available at law or in equity.
SECTION
8.03. Amendment.
This
Agreement may be amended by the parties at any time before or after receipt
of
the Company Stockholder Approval; provided,
however,
that
(i) after receipt of the Company Stockholder Approval, there shall be made
no amendment that by Law requires further approval by the stockholders of the
Company without the further approval of such stockholders and (ii) no
amendment shall be made to this Agreement after the Effective Time. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties.
SECTION
8.04. Extension;
Waiver.
At any
time prior to the Effective Time, the parties may (a) extend the time for
the performance of any of the obligations or other acts of the other parties,
(b) waive any inaccuracies in the representations and warranties contained
in this Agreement or in any document delivered pursuant to this Agreement or
(c) subject to the proviso of Section 8.03, waive compliance with any
of the agreements or conditions contained in this Agreement. Subject to the
proviso in Section 8.03, no extension or waiver by the Company shall
require the approval of the stockholders of the Company. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set
forth
in an instrument in writing signed on behalf of such party. The failure of
any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
SECTION
8.05. Procedure
for Termination, Amendment, Extension or Waiver. (a)
A
termination of this Agreement pursuant to Section 8.01, an amendment of
this Agreement pursuant to Section 8.03 or an extension or waiver pursuant
to Section 8.04 shall, in order to be effective, require in the case of
Parent, Acquisition Sub or the Company, action by its Board of Directors or
the
duly authorized designee of its Board of Directors. Termination of this
Agreement prior to the Effective Time shall not require the approval of the
stockholders of the Company.
(b)
The
Company may terminate this Agreement pursuant to Section 8.01(d) only if
prior to the Company Stockholder Approval (i) the Company Board has
received a Superior Company Proposal, (ii) in light of such Superior
Company Proposal a majority of the directors of the Company shall have
determined in good faith, after consultation with outside counsel, that it
is
necessary for the Company Board to withdraw or modify its approval or
recommendation of this Agreement or the Merger in
53
order
to
comply with its fiduciary duty under applicable Law, (iii) the Company has
notified Parent in writing of the determinations described in clause (ii)
above and has given Parent an opportunity to submit a revised proposal, (iv)
at
least five business days following receipt by Parent of the notice referred
to
in clause (iii) above, and taking into account any revised proposal made by
Parent since receipt of the notice referred to in clause (iii) above, such
Superior Company Proposal remains a Superior Company Proposal and a majority
of
the directors of the Company has again made the determinations referred to
in
clause (ii) above, (v) the Company is in compliance with
Section 5.02, (vi) the Company has concurrently with such termination
paid Parent a termination fee of $2,500,000, (vii) the Company Board
concurrently approves, and the Company concurrently enters into, a definitive
agreement providing for the implementation of such Superior Company Proposal and
(viii) Parent is not at such time entitled to terminate this Agreement
pursuant to Section 8.01(c).
ARTICLE
IX
General
Provisions
SECTION
9.01. Nonsurvival
of Representations and Warranties.
None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section 9.01 shall not limit any covenant or agreement of the parties which
by its terms contemplates performance after the Effective Time.
SECTION
9.02. Notices.
All
notices, requests, claims, demands and other communications under this Agreement
shall be in writing and shall be deemed given upon receipt by 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 Sub, to
|
Asahi
Tec Corporation
|
|
|
▇▇▇-▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
|
|
|
▇▇▇▇▇▇▇▇
▇▇▇-▇▇▇▇, ▇▇▇▇▇
|
|
|
Fax:
▇▇-▇▇▇-▇▇-▇▇▇▇
|
Attention:
▇▇▇▇▇▇
▇▇▇▇▇▇
|
with
a copy to:
|
|
|
▇▇▇▇▇▇▇▇
Mori & Tomotsune
|
|
|
Izumi
▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
▇-▇-▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇,
|
|
|
▇▇▇▇▇
▇▇▇-▇▇▇▇, ▇▇▇▇▇
|
|
|
Fax:
(▇▇) ▇▇▇▇-▇▇▇▇
|
54
Attention:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
|
with
a copy to:
RHJ
International SA
▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
Attention:
▇▇▇ ▇▇▇▇▇
with
a
copy to:
|
Cravath,
Swaine & ▇▇▇▇▇ LLP
Worldwide
Plaza
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
(b)
if
to the
Company, to
|
Metaldyne
Corporation
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
|
Attention:
Chief Executive Officer and General Counsel
with
a copy to:
▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
W.
▇▇▇▇▇▇ ▇▇▇▇▇
|
55
SECTION
9.03. Definitions.
For
purposes of this Agreement:
An
“affiliate”
of
any
person means another person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
such first person.
“$”
means
United States Dollars, the lawful currency of the United States.
A
“material
adverse effect”
on
a
party means (a) a material adverse effect on the business, assets,
financial condition or results of operations of the party and its subsidiaries,
taken as a whole except, in each case, to the extent arising or resulting from,
or caused or attributable to, any of the following, individually or taken
together: (i) general U.S., Japanese or global economic, political or
market conditions to the extent not materially disproportionately affecting
the
party and its subsidiaries, taken as whole, relative to other automotive
industry participants in the party’s geographic area, (ii) changes in
applicable generally accepted accounting principles or Law, (iii) the
public announcement of the Transactions, the consummation of the Transactions
or
the execution of the Transaction Agreements or (iv) acts of terrorism or
war to the extent not materially disproportionately affecting the party and
its
subsidiaries, taken as whole, relative to other automotive industry participants
in the party’s geographic area, (b) a material adverse effect on the
ability of the party to perform its obligations under this Agreement or the
other Transaction Agreements to which it is a party or (c) a material
adverse effect on the ability of the party to consummate the Transactions to
which it is a party or, in the case of the Company, the TM
Distribution.
“Parent
Voting Agreement”
means
the voting agreement executed by RHJI and dated as of the date of this Agreement
whereby RHJI agrees to take specified actions in furtherance of the Transactions
and approve the amendment of Parent’s articles of incorporation to authorize the
issuance of convertible preferred stock of Parent.
A
“person”
means
any individual, firm, corporation, partnership, company, limited liability
company, trust, joint venture, association, Governmental Entity or other
entity.
A
“subsidiary”
of
any
person means another person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its Board of Directors or other governing body (or, if
there
are no such voting interests, 50% or more of the equity interests of which)
is
owned directly or indirectly by such first person.
“Transaction
Agreements”
means
this Agreement, the Parent Voting Agreement, the Parent Stock Purchase Agreement
and the Other Stock Purchase Agreements and the documents delivered in
connection with the foregoing. For the avoidance of doubt, documents delivered
in connection with the TM Distribution shall not be deemed to be Transaction
Documents.
56
SECTION
9.04. Interpretation.
When a
reference is made in this Agreement to a Section, such reference shall be to
a
Section of this Agreement unless otherwise indicated. The table of contents
and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words “include”, “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation”.
SECTION
9.05. Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule or Law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon
such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
SECTION
9.06. Counterparts.
This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to
the
other parties.
SECTION
9.07. Entire
Agreement; No Third-Party Beneficiaries.
This
Agreement, and the Transaction Agreements taken together with the Company
Disclosure Letter, (a) constitute the entire agreement, and supersede after
the date of this Agreement all prior agreements and understandings, both written
and oral, among the parties with respect to the Transactions (other than the
Confidentiality Agreement) and (b) except for Sections 6.04 and 6.06,
are not intended to confer upon any person other than the parties any rights
or
remedies. Notwithstanding clause (b) of the immediately preceding sentence,
following the Effective Time the provisions of Article II shall be
enforceable by holders of Certificates.
SECTION
9.08. Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof, except to the extent the
laws of the State of Delaware are mandatorily applicable to the
Merger.
SECTION
9.09. Assignment.
Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by any of the parties without the prior written consent of the other
parties, except that Acquisition Sub may assign, in its sole discretion, any
of
or all its rights, interests and obligations under this Agreement to Parent
or
to any direct wholly owned subsidiary of Parent, but no such assignment shall
relieve Acquisition Sub
57
of
any of
its obligations under this Agreement. Any purported assignment without such
consent shall be void. Subject to the preceding sentences, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the parties
and
their respective successors and assigns.
SECTION
9.10. Enforcement.
The
parties agree that irreparable damage would occur in the event that any of
the
provisions of this Agreement or any Transaction Agreement were not performed
in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement or any Transaction Agreement
and to enforce specifically the terms and provisions of this Agreement and
each
other Transaction Agreement in any New York state court, any Federal court
located in the State of New York or the State of Delaware or in any
Delaware state court, this being in addition to any other remedy to which they
are entitled at law or in equity. In addition, each of the parties hereto
(a) consents to submit itself to the personal jurisdiction of any New York
state court, any Federal court located in the State of New York or the
State of Delaware or in any Delaware state court in the event any dispute arises
out of this Agreement, any Transaction Agreement or any Transaction,
(b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court,
(c) agrees that it will not bring any action relating to this Agreement or
any other Transaction Agreement or any Transaction in any court other than
any
New York state court, any Federal court sitting in the State of New York or
the
State of Delaware or any Delaware state court and (d) waives any right to
trial by jury with respect to any action related to or arising out of this
Agreement or any other Transaction Agreement or any other
Transaction.
SECTION
9.11. Tax
Treatment. (a)
The
Principal Company Stockholders intend to report this transaction as subject
to
Code Section 351. Unless otherwise required by law, none of the parties
hereto or their affiliates shall take any position inconsistent with the
foregoing.
(b)
To
avoid
application of Code Section 367(a)(1), Parent covenants that, after the
Closing, Parent will ensure that the Company complies with the reporting
requirements in Treasury Regulation Section 1.367(a)-3(c)(6).
(c)
Parent
shall provide to the Principal Company Stockholders any information concerning
Parent or the Company necessary to comply with the requirements of
Section 6038B of the Code and final and temporary Treasury Regulations
promulgated thereunder (and any successor Regulations).
(d)
Parent
agrees it will promptly notify the Principal Company Stockholders after any
event of disposition occurs which is described in Treasury Regulation
Section 1.367(a)-8.
58
IN
WITNESS
WHEREOF, Parent, Acquisition Sub and the Company have
duly
executed this Agreement, all as of the date first written above.
ASAHI
TEC
CORPORATION,
by
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
ARGON
ACQUISITION CORP.,
by /s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
METALDYNE
CORPORATION,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President,
General Counsel, Secretary
& Government Relations
59