Exhibit 99.1
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
BETWEEN
AMERICAN WATER WORKS COMPANY, INC.
AND
NATIONAL ENTERPRISES INC.
Dated as of February 8, 1999
TABLE OF CONTENTS
ARTICLE I DEFINITIONS..........................................................1
Section 1.1 Certain Definitions.......................................1
ARTICLE II THE MERGER..........................................................6
Section 2.1 The Merger................................................6
Section 2.2 Effective Time............................................6
Section 2.3 Effect of the Merger......................................6
Section 2.4 Certificate of Incorporation; Bylaws......................6
Section 2.5 Directors and Officers....................................7
Section 2.6 Effect on Capital Stock...................................7
Section 2.7 Surrender of Certificates.................................8
Section 2.8 No Further Ownership Rights in Company Common Shares......9
Section 2.9 Lost, Stolen, or Destroyed Company Certificates...........9
Section 2.10 Closing; Closing Date....................................9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................10
Section 3.1 Organization and Qualification; Interest in Other
Entities.................................................10
Section 3.2 Certificate of Incorporation and Bylaws..................10
Section 3.3 Capitalization...........................................10
Section 3.4 Authority Relative to this Agreement.....................11
Section 3.5 No Conflicts; Required Filings and Consents..............11
Section 3.6 Compliance; Permits......................................12
Section 3.7 Financial Statements.....................................13
Section 3.8 Absence of Certain Changes or Events.....................14
Section 3.9 Absence of Litigation....................................14
Section 3.10 Benefit Plans...........................................14
Section 3.11 Labor Matters...........................................16
Section 3.12 Taxes...................................................17
Section 3.13 Real Estate.............................................18
Section 3.14 Title to Property.......................................19
Section 3.15 Environmental Matters...................................20
Section 3.16 Contracts...............................................22
Section 3.17 Brokers.................................................23
Section 3.18 Intellectual Property...................................23
Section 3.19 Accounts Receivable.....................................23
Section 3.20 Undisclosed Liabilities.................................24
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Section 3.21 Product Liability.......................................24
Section 3.22 Supply of Utilities.....................................24
Section 3.23 Insurance...............................................24
Section 3.24 Relationships with Customers and Suppliers..............25
Section 3.25 WARN Act................................................25
Section 3.26 Condition of Assets.....................................25
Section 3.27 Transactions with Related Parties.......................25
Section 3.28 Year 2000 Compliance....................................26
Section 3.29 Pooling.................................................26
Section 3.30 Disclosures.............................................26
Section 3.31 Schedules..............................................26
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ACQUIROR.........................27
Section 4.1 Organization and Qualification...........................27
Section 4.2 Certificate of Incorporation and Bylaws..................27
Section 4.3 Capitalization...........................................27
Section 4.4 Authority Relative to this Agreement....................27
Section 4.5 No Conflict; Required Filings and Consents...............28
Section 4.6 SEC Filings; Financial Statements........................28
Section 4.7 Absence of Certain Changes or Events.....................29
Section 4.8 Brokers..................................................29
Section 4.9. Year 2000 Compliance...................................29
Section 4.10 Pooling.................................................30
Section 4.11. Disclosures...........................................30
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER..............................30
Section 5.1 Conduct of Business by the Company Pending the Merger....30
Section 5.2 Other Proposals; Negotiations............................33
Section 5.3 Mutual Covenants.........................................33
Section 5.4 Disclosure Schedules.....................................34
Section 5.5 Filings and Authorizations...............................34
Section 5.6 Cooperation..............................................35
Section 5.7 State Takeover Statutes..................................36
Section 5.8 Delivery of Financial Statements and Reports.............36
ARTICLE VI ADDITIONAL AGREEMENTS..............................................36
Section 6.1 Notification of Certain Matters..........................36
Section 6.2 Further Action...........................................37
Section 6.3 Public Announcements.....................................37
Section 6.4 Affiliates...............................................37
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Section 6.5 Preserving Qualification as Reorganization under
Section 368 of the Code and Pooling of Interests
Accounting Treatment.....................................38
Section 6.6 Additional Board Seats...................................38
Section 6.7 Employee Matters.........................................38
Section 6.8 Tax Certificates.........................................38
Section 6.9 Due Diligence............................................38
ARTICLE VII CONDITIONS OF MERGER..............................................39
Section 7.1 Conditions to Obligations of Each Party to Effect
the Merger...............................................39
Section 7.2 Additional Conditions to Obligations of Acquiror.........39
Section 7.3 Additional Conditions to Obligations of the Company......41
ARTICLE VIII TERMINATION, AMENDMENT, AND WAIVER...............................42
Section 8.1 Termination..............................................42
Section 8.2 Effect of Termination....................................43
Section 8.3 Fees and Expenses........................................43
ARTICLE IX GENERAL PROVISIONS.................................................44
Section 9.1 Nature and Survival of Representations and Warranties....44
Section 9.2 Construction.............................................44
Section 9.3 Notices..................................................44
Section 9.4 Exhibits and Schedules...................................46
Section 9.5 Severability.............................................46
Section 9.6 Entire Agreement; Beneficiaries..........................46
Section 9.7 Assignment...............................................46
Section 9.8 Parties in Interest......................................46
Section 9.9 Governing Law............................................46
Section 9.10 Counterparts............................................46
Section 9.11 Remedies for Breach.....................................46
Section 9.12 Commencement of Suits, Actions, Etc.....................47
Section 9.13 Amendment; Waiver.......................................47
Section 9.14 Captions................................................47
Section 9.15 Additional Disclosures..................................47
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SCHEDULES AND EXHIBITS
Schedules
Schedule 3.1 Organization and Qualification
Schedule 3.3 Capitalization; Stockholders Agreements
Schedule 3.5 No Conflicts; Required Filings and Consents
Schedule 3.6 Compliance; Permits
Schedule 3.7 Financial Statements
Schedule 3.8 Absence of Certain Changes or Events
Schedule 3.9(a) Absence of Litigation
Schedule 3.9(b) Outstanding Judgments, Orders and Decrees
Schedule 3.10 Benefit Plans
Schedule 3.11 Labor Matters
Schedule 3.12(a) Taxes
Schedule 3.12(b) Taxes
Schedule 3.13(a) Real Estate
Schedule 3.13(b) Real Estate
Schedule 3.13(c) Schedule 3.13(c) Notices of Increased Assessment
Schedule 3.14 Title to Property
Schedule 3.15(a) Environmental Matters
Schedule 3.15(b) Environmental Matters
Schedule 3.15(c) Environmental Matters
Schedule 3.16 Contracts
Schedule 3.18(a) Intellectual Property
Schedule 3.18(b) Intellectual Property
Schedule 3.20 Undisclosed Liabilities
Schedule 3.21 Product Liability
Schedule 3.22 Supply of Utilities
Schedule 3.23 Insurance
Schedule 3.25 WARN Act
Schedule 3.26(a) Condition of Assets
Schedule 3.26(b) Condition of Assets
Schedule 3.27 Transactions with Related Parties
Schedule 3.28 Restrictions
Schedule 3.29 Year 2000 Compliance
Schedule 4.3 Capitalization
Schedule 4.5 No Conflicts; Required Filings and Consents
Schedule 4.9 Year 2000 Compliance
Schedule 5.1 Conduct of Business
Schedule 7.2(h) Resignations of Certain Officers and Directors
Exhibits
Exhibit A Certificate of Merger
Exhibit B Form of Legal Opinion of the Company's counsel
Exhibit C Form of Legal Opinion of Acquiror's counsel
Exhibit D Form of Registration Rights Agreement
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated as of
February 8, 1999 (the "Agreement"), is by and between AMERICAN WATER WORKS
COMPANY, INC., a Delaware corporation ("Acquiror") and NATIONAL ENTERPRISES
INC., a Missouri corporation (the "Company").
WHEREAS, the Boards of Directors of Acquiror and the Company have each
determined that it is in the best interests of their respective stockholders for
the Company to merge (the "Merger") with and into Acquiror upon the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, the Board of Directors of Acquiror has approved the Merger in
accordance with the provisions of Section 251 of the Delaware General
Corporation Law, as amended from time to time (the "DGCL");
WHEREAS, the Board of Directors of the Company, and the stockholders
of the Company, have each approved the Merger in accordance with the provisions
of Sections 410 and 425, respectively, of The General and Business Corporation
Law of Missouri, as amended from time to time (the "MGBCL");
WHEREAS, for federal income tax purposes it is intended that the
Merger will qualify as a reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended from time to time (the "Code");
WHEREAS, the parties intend that the Merger be accounted for as a
pooling-of-interests for financial reporting purposes; and
NOW THEREFORE, in consideration of the mutual representations,
warranties, covenants, and agreements contained in this Agreement and intending
to be legally bound, Acquiror and the Company agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Definitions. For purposes of this Agreement, the
following definitions will apply:
(a) "Access Rights" is defined in Section 3.13(b).
(b) "Acquiror" is defined in the recitals to this Agreement.
(c) "Acquiror Breach" is defined in Section 8.1(d).
(d) "Acquiror Common Stock" means the common stock, par value
$1.25 per share, of Acquiror.
(e) "Acquiror SEC Reports" is defined in Section 4.6(a).
(f) "Affiliate" has the meaning given to it in Rule 12b-2 under
the Exchange Act.
(g) "Agreement" is defined in the recitals to this agreement.
(h) "Antitrust Division" is defined in Section 5.5.
(i) "APB No. 16" is defined in Section 3.29.
(j) "Authority" is defined in Section 3.9.
(k) "Balance Sheet" is defined in Section 3.7.
(l) "Balance Sheet Date" is defined in Section 3.7.
(m) "Benefit Plans" is defined in Section 3.10(a).
(n) "CERCLA" is defined in Section 3.15(c)(vi).
(o) "CERCLIS" is defined in Section 3.15(c)(vi).
(p) "Certificates of Merger" is defined in Section 2.1.
(q) "Closing" is defined in Section 2.10.
(r) "Closing Date" is defined in Section 2.10.
(s) "Code" is defined in the recitals to this Agreement.
(t) "Collective Bargaining Agreements" is defined in Section
5.1(i).
(u) "Company" is defined in the recitals to this Agreement.
(v) "Company Breach" is defined in Section 8.1(e).
(w) "Company Certificates" means certificates that, immediately
prior to the Effective Time, represented issued and outstanding
Company Common Shares.
(x) "Company Common Shares" means common stock, no par value per
share, of the Company.
(y) "Company Disclosure Schedules" means the Schedules to this
Agreement (other than Schedule 4.5 and Schedule 4.9 hereto).
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(z) "Company Stockholders" is defined in Section
7.2(g).
(aa) "Constituent Corporations" is defined in Section 2.3.
(ab) "Contracts" is defined in Section 3.16.
(ac) "DGCL" is defined in the recitals to this Agreement.
(ad) "Effective Time" is defined in Section 2.2.
(ae) "Environmental Law" is defined in Section 3.15(a).
(af) "Environmental Permits" is defined in Section 3.15(a).
(ag) "Environmental Reports" is defined in Section 3.15(c)(xi).
(ah) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
(ai) "ERISA Affiliate" means any trade or business
(whether or not incorporated) that is, or was at any time with respect
to which an applicable statute of limitations remains open, under
common control with the Company or any Subsidiary, as the case may be,
within the meaning of Section 414 of the Code.
(aj) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
(ak) "Exchange Agent" is defined in Section 2.7(a).
(al) "Exchange Ratio" is defined in Section 2.6(a).
(am) "Financial Statements" is defined in Section 3.7.
(an) "FTC" is defined in Section 5.5.
(ao) "GAAP" means generally accepted accounting principles.
(ap) "Hazardous Substances" is defined in Section 3.15(c)(i).
(aq) "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended from time to time.
(ar) "ILCC" is defined in Section 5.5.
(as) "INURC" is defined in Section 5.5.
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(at) "Intellectual Property Right" means any trademark, service
▇▇▇▇, registration thereof or application for registration therefor,
trade name, invention, patent, patent application, trade secret,
know-how, copyright, copyright registration, application for copyright
registration, or any other similar type of proprietary intellectual
property right, in each case which is owned or licensed and used or
held for use by the Company or any Subsidiary.
(au) "IRS" is defined in Section 3.10(b).
(av) "Liens" is defined in Section 3.3.
(aw) "Management" is defined in Section 3.15(c)(i).
(ax) "Material Adverse Effect," when used in connection with the
Company, the Subsidiaries or Acquiror, means any individual or
cumulative changes or effects that are or are reasonably likely to be
materially adverse to the properties, business, operations,
obligations, capitalization, financial condition or results of
operations of the Company or Acquiror, as the case may be, and its
subsidiaries, taken as a whole or to the ability of the Company, or
Acquiror, as the case may be, to perform its obligations hereunder or
to consummate the transactions contemplated hereby, provided, that
"Material Adverse Effect" shall not include any change, effect,
condition, event or circumstance which are deemed not to constitute a
breach of a representation or warranty or failure of a condition
pursuant to Section 9.15 or attributable to (i) changes, effects,
conditions, events or circumstances that generally affect the
industries in which the Company operates (including legal and
regulatory changes), (ii) general economic conditions, or (iii)
changes arising from the consummation of the Merger or the
announcement of the potential acquisition of the Company by Acquiror
or the execution of this Agreement.
(ay) "Merger" is defined in the recitals to this Agreement.
(az) "Merger Consideration" is defined in Section 2.6(a).
(ba) "MGBCL" is defined in the recitals to this Agreement.
(bb) "MPSC" is defined in Section 5.5.
(bc) "NYPSC" is defined in Section 5.5.
(bd) "NYSE" means the New York Stock Exchange, Inc.
(be) "OSHA" means the Occupational Safety and Health Act, as
amended from time to time.
(bf) "PCBs" is defined in Section 3.15(c)(i).
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(bg) "Permits" is defined in Section 3.6(b).
(bh) "Permitted Exceptions" is defined in Section 3.14.
(bi) "Person" means an individual, corporation, partnership,
limited liability company, association, trust, unincorporated
organization, other entity, or group (as defined in Section 13(d)(3)
of the Exchange Act).
(bj) "RCRA" is defined in Section 3.15(c)(iii).
(bk) "Real Estate" means all real property owned, leased,
occupied or used by the Company or any Subsidiary, including
easements, rights of way, water lines, rights of use, licenses,
hereditaments, tenements, privileges and other appurtenances thereto
or otherwise (such as appurtenant rights in and to public streets).
(bl) "Real Property" means the Real Estate, together
with all fixtures, fittings, buildings, structures and other
improvements erected thereon, but not including easements, rights of
way, water lines, rights of use, licenses, hereditaments, tenements,
privileges and other appurtenances thereto or otherwise (such as
appurtenant rights in and to public streets).
(bm) "Released" is defined in Section 3.15(c)(vii).
(bn) "Returns" is defined in Section 3.12(a)(i).
(bo) "Rule 145" and "Rule 145 Affiliate" are defined in Section
6.4.
(bp) "SEC" means the Securities and Exchange Commission.
(bq) "Securities Act" means the Securities Act of 1933, as
amended from time to time.
(br) "Subsidiary or Subsidiaries" means any corporation,
partnership, limited liability company, joint venture, or other legal
entity of which the Company (either alone or together with any other
subsidiary) owns, directly or indirectly (through one or more
subsidiaries), more than 50% of the stock or other equity interests
the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of the corporation,
partnership, limited liability company, joint venture, or other legal
entity.
(bs) "Surviving Corporation" means Acquiror as the surviving
corporation after the Merger.
(bt) "Tax," "Taxable," "Taxes," and "Taxing Authority" are
defined in Section 3.12(c).
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(bu) "Warn Act" means the Worker Adjustment and Retraining
Notification Act, as codified at 29 U.S.C. " 2102 - 2109, as amended
from time to time.
ARTICLE II
THE MERGER
Section 2.1 The Merger. At the Effective Time and subject to the
terms and conditions of this Agreement, the Company will be merged with and into
Acquiror pursuant to this Agreement, the Certificates of Merger attached as
Exhibit A hereto (the "Certificates of Merger") and the applicable provisions of
the DGCL and MGBCL, the separate corporate existence of the Company will cease,
and Acquiror will continue as the Surviving Corporation.
Section 2.2 Effective Time. As promptly as practicable after the
satisfaction or waiver of the conditions set forth in Article VII, the parties
will cause the Merger to be consummated by executing and filing with the
Secretaries of State of the States of Delaware and Missouri, in accordance with
the DGCL and MGBCL, the Certificates of Merger. The Merger will become effective
at the time at which the Certificates of Merger are filed with the Secretaries
of State of the State of Delaware and Missouri (the "Effective Time").
Section 2.3 Effect of the Merger. At the Effective Time, the effect
of the Merger will be as provided by the DGCL and the MGBCL. Without limiting
the foregoing, at the Effective Time all of the rights, privileges, powers and
franchises, of a public as well as of a private nature, of each of Acquiror and
the Company (the "Constituent Corporations"), and all property, real, personal
and mixed, and all debts due on whatever account, as well as stock
subscriptions, and all other things in action, and all and every other interest,
of or belonging to or due to each of the Constituent Corporations shall be taken
and deemed to be transferred to and vested in the Surviving Corporation without
further act or deed, and the title to any real estate, or any interest therein,
vested in either of the Constituent Corporations shall not revert or be in any
way impaired by reason of the Merger.
Section 2.4 Certificate of Incorporation; Bylaws.
(a) Certificate of Incorporation. At the Effective Time, the
Certificate of Incorporation of Acquiror, as in effect immediately
prior to the Effective Time, will be the Certificate of Incorporation
of the Surviving Corporation until thereafter amended as provided by
the DGCL.
(b) Bylaws. The Bylaws of Acquiror, as in effect immediately
prior to the Effective Time, will be the Bylaws of the Surviving
Corporation until thereafter amended as provided by the DGCL, the
Certificate of Incorporation of the Surviving Corporation, and those
Bylaws.
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Section 2.5 Directors and Officers. The directors of Acquiror
immediately prior to the Effective Time will be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and the Bylaws of the Surviving Corporation. The officers of
Acquiror immediately prior to the Effective Time will be the initial officers of
the Surviving Corporation, each to hold office until his or her successor is
elected or appointed.
Section 2.6 Effect on Capital Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of the Company or the holders
of the capital stock of the Company:
(a) Conversion of Company Common Shares. Each Company Common
Share issued and outstanding immediately prior to the Effective Time
(other than any Company Common Shares canceled pursuant to Section
2.6(b)) will be canceled and converted into the right to receive
15.5022106 shares of Acquiror Common Stock. For purposes of this
Agreement, the term "Merger Consideration" means the aggregate of the
shares of Acquiror Common Stock into which Company Common Shares are
to be converted in the Merger, and the term "Exchange Ratio" means the
ratio of 15.5022106 shares of Acquiror Common Stock to one Company
Common Share.
(b) Cancellation of Treasury Stock. Each Company Common
Share held in the treasury of the Company, and each Company Common
Share owned by any direct or indirect wholly-owned subsidiary of the
Company, immediately prior to the Effective Time will be canceled and
retired without any conversion thereof or payment of any consideration
therefor and will cease to exist.
(c) Common Stock of Acquiror. Each share of Acquiror Common
Share issued and outstanding immediately prior to the Effective Time
will remain issued and outstanding, and together with the Common Stock
issued in accordance with this Agreement, will immediately thereafter
constitute all of the issued and outstanding shares of the capital
stock of the Surviving Corporation. Each certificate evidencing shares
of Acquiror Common Stock will continue to evidence ownership of Common
Stock of the Surviving Corporation.
(d) Adjustments to Exchange Ratio. The Exchange Ratio will
be adjusted to reflect the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of
securities convertible into Acquiror Common Stock or Company Common
Shares), recapitalization, or other like change with respect to
Acquiror Common Stock or the Company Common Shares occurring after the
date of this Agreement and prior to the Effective Time.
(e) Fractional Shares. No fraction of a share of Acquiror
Common Stock or cash in lieu of fractional share will be issued or
paid in the Merger.
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Section 2.7 Surrender of Certificates.
(a) Exchange Agent. The Company and Acquiror agree that the
Acquiror will act as exchange agent (the "Exchange Agent") in the
Merger.
(b) Availability of Share Certificates. At the Effective
Time, Acquiror will have available the shares of Acquiror Common Stock
included in the Merger Consideration. Any former stockholders of the
Company who have not theretofore received the Merger Consideration to
which they are entitled may thereafter look only to Acquiror as
general creditors for delivery of the Merger Consideration.
(c) Share Exchange Procedures. At least two weeks prior to
the Effective Time, the Acquiror will cause to be mailed to each
Person who is, at such time, a holder of record of a Company
Certificate representing Company Common Shares (i) a letter of
transmittal and (ii) instructions for use in effecting the surrender
of the Company Certificates in exchange for shares of Acquiror Common
Stock. The letter of transmittal ("Letter of Transmittal") will state
that delivery will be effected, and risk of loss and title to the
Company Certificates will pass, only upon delivery of the Company
Certificates to the Exchange Agent and will be in such form and have
such other provisions as are reasonably acceptable to both Acquiror
and the Company. Upon the later of the Effective Time or the surrender
of a Company Certificate to the Exchange Agent for cancellation,
together with a duly completed and properly executed letter of
transmittal and any other documents exercised by the instructions, the
Acquiror will issue certificates for the shares of Acquiror Common
Stock to which the holder of the surrendered Company Certificate is
entitled under Section 2.6(a), and the Company Certificate so
surrendered will forthwith be canceled. The certificate of shares of
Acquiror Common Stock to be issued shall be in the denominations
specified in the Letter of Transmittal.
(d) Status of Unexchanged Shares. Until duly surrendered for
cancellation in accordance with Section 2.7(c), each Company
Certificate will be deemed, from and after the Effective Time and for
all corporate purposes other than the payment of dividends, to
evidence the ownership of the number of whole shares of Acquiror
Common Stock included in the Merger Consideration to which the holder
is entitled under Section 2.6(a). No dividends or other distributions,
if any, with respect to Acquiror Common stock will be paid to the
holder of any unsurrendered Company Certificate with respect to the
shares of Acquiror Common Stock represented by the Company Certificate
until the holder of record of the Company Certificate duly surrenders
it for exchange in accordance with Section 2.7(c). Instead, Acquiror
will hold all dividends or other distributions with respect to shares
of Acquiror Common Stock represented by unsurrendered Company
Certificates, and the Acquiror will pay, without interest, the
dividends or other distributions to the record holder of those shares
of Acquiror Common Stock when the Company Certificate is duly
surrendered in accordance with Section 2.7(c).
(e) Transfers of Ownership. If any certificate for shares of
Acquiror Common Stock is to be issued in a name other than that in
which the Company Certificate surrendered in exchange therefor is
registered, it will be a condition to the issuance thereof that the
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Company Certificate be properly endorsed and otherwise in proper form
for transfer and that the Person requesting the exchange has (i) paid
any transfer or other taxes required by reason of the issuance of the
certificate in any name other than the name of the registered holder
of the Company Certificate or (ii) established to the satisfaction of
the Exchange Agent that any such tax has been paid or is not payable.
(f) No Liability. Notwithstanding anything to the contrary
in this Section 2.7, neither the Exchange Agent, the Surviving
Corporation, Acquiror, nor the Company will be liable to a former
holder of Company Common Shares for any amount properly paid to a
public official pursuant to any applicable abandoned property,
escheat, or similar law.
Section 2.8 No Further Ownership Rights in Company Common Shares. The
issuance or payment of the Merger Consideration pursuant to this Article II will
be in full satisfaction of all rights pertaining to the Company Common Shares
surrendered in exchange therefor. After the Effective Time, there will be no
further registration of transfers on the records of the Surviving Corporation of
Company Certificates. If, after the Effective Time, Company Certificates are
duly presented to the Surviving Corporation for any reason, they will be
canceled and exchanged as provided in this Article II.
Section 2.9 Lost, Stolen, or Destroyed Company Certificates. In the
event any Company Certificates have been lost, stolen, or destroyed and the
holder thereof is unable to obtain a new certificate by reason of the fact that
there can be no further registration of transfers of such certificates on the
records of the Surviving Corporation pursuant to Section 2.8, the Exchange Agent
will issue in exchange therefor, upon receipt of an affidavit by the holder
thereof stating that the Company Certificates have been lost, stolen, or
destroyed, the Merger Consideration to which the holders is entitled under
Section 2.6(a); except that Acquiror may, in its discretion and as a condition
precedent to the issuance or payment thereof, require the holder to deliver a
bond in such sum as it may reasonably direct as indemnify against any claim that
may be made against the Surviving Corporation, Acquiror, or the Exchange Agent
with respect to the Company Certificates alleged to have been lost, stolen, or
destroyed.
Section 2.10 Closing; Closing Date. Subject to the terms and
conditions of this Agreement, the consummation of the Merger (the "Closing")
shall take place at 10 A.M. (Philadelphia time), on a date mutually satisfactory
to the Company and Acquiror that is no later than the fifth Business Day after
satisfaction (or waiver) of the conditions to Closing set forth in Article VII
(other than those conditions which require the delivery of any documents or the
taking of other action, at the Closing) at the offices of Dechert Price &
▇▇▇▇▇▇, 4000 ▇▇▇▇ Atlantic Tower, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or
on such other date and at such other time or place as may be mutually agreed
upon by the parties hereto (the "Closing Date").
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Acquiror as follows:
Section 3.1 Organization and Qualification; Interest in Other
Entities. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Missouri and has all requisite
corporate power and authority to own, lease and operate its business as and
where presently being conducted. Each Subsidiary is a corporation duly
organized, validly existing and in good standing under the state of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own, lease and operate its business as and where presently being
conducted. Each of the Company and the Subsidiaries is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of the properties owned, leased, or
operated by it or the nature of its activities makes such qualification or
licensing necessary, except where such failure would not have a Material Adverse
Effect. Set forth on Schedule 3.1 is a list of each jurisdiction in which the
Company is qualified or licensed to do business and is in good standing. The
Company has set forth on Schedule 3.1 a schedule of the Subsidiaries of the
Company that specifies for each Subsidiary: (i) the jurisdictions in which each
Subsidiary is incorporated, qualified or licensed to do business and is in good
standing; (ii) the capital structure, including authorized, issued and
outstanding capital stock, of each Subsidiary and (iii) the shareholders of each
such Subsidiary.
Section 3.2 Certificate of Incorporation and Bylaws. The Company has
heretofore delivered a complete and correct copy of the Certificate or Articles
of Incorporation and the Bylaws, each as amended to date, of the Company and
each Subsidiary, and each such Certificate or Articles of Incorporation and
Bylaws, as so delivered, have not been amended, modified, or rescinded and
remain in full force and effect. The Company and the Subsidiaries are not in
violation of any of the provisions of their respective Certificates or Articles
of Incorporation or Bylaws.
Section 3.3 Capitalization. The authorized capital stock of the
Company solely consists of 1,000,000 Company Common Shares. As of the date of
this Agreement, 963,540 Company Common Shares were issued and outstanding, all
of which are duly authorized, validly issued, fully paid, and nonassessable, and
no Company Common Shares were held in the treasury of the Company or owned by a
wholly-owned Subsidiary of the Company. There are no shares of Company preferred
stock authorized, issued or outstanding. The Company has no outstanding bonds,
debentures, notes, or other obligations the holders of which have the right to
vote (or are convertible into or exercisable for securities having the right to
vote) with the stockholders of the Company on any matter. There are no
subscriptions, options, warrants, or other rights, convertible securities,
agreements, arrangements, or commitments of any character relating to the issued
or unissued capital stock of the Company or any Subsidiary to which the Company
or any Subsidiary is a party or obligating the Company or any Subsidiary to
issue or sell any shares of capital stock of, or other equity interests in, the
- 10 -
Company or any Subsidiary. There are no obligations, contingent or otherwise, of
the Company or any Subsidiary to repurchase, redeem, or otherwise acquire any
capital stock of the Company or any Subsidiary. All of the outstanding shares of
capital stock of each Subsidiary are duly authorized, validly issued, fully
paid, and nonassessable, and all such shares are owned by the Company or by a
wholly-owned Subsidiary of the Company, free and clear of all security
interests, liens, claims, pledges, agreements, limitations in voting rights,
charges or other encumbrances of any nature whatsoever (collectively, "Liens").
Except as set forth on Schedule 3.3 and in the Stock Restriction and Purchase
Agreement dated November 15, 1985 and amended and renewed November 17, 1989, and
Agreement By and Among the Directors of National Enterprises, Inc., which
agreements will be terminated pursuant to Section 7.2(i), there are no
stockholder, voting trust, or other agreements or understandings to which the
Company or any Subsidiary is a party or to which any of them is bound relating
to the voting of any shares of the capital stock of the Company or any
Subsidiary. All of the Company Common Shares are owned as of the date of this
Agreement by the Company stockholders, and in the amounts, set forth on Schedule
3.3. All of the Company Common Shares will be delivered to the Acquiror free and
clear of all Liens. The Company shall, from time to time, advise Acquiror of any
transfers of record ownership of the outstanding capital stock of the Company
prior to the Effective Time.
Section 3.4 Authority Relative to this Agreement. The Company has
all corporate power and authority required to execute and deliver this Agreement
and to perform its obligations under this Agreement. The Board of Directors of
the Company has approved, and recommended to the stockholders of the Company
that they approve, the Merger and this Agreement. The execution and delivery of
this Agreement by the Company, and the performance by the Company of its
obligations under this Agreement, have been duly and validly authorized by all
necessary corporate and stockholder action including, with respect to the
Merger, the adoption of this Agreement and the approval of the Merger by the
holders of the outstanding Company Common Shares in accordance with and as
required by the MGBCL, the Company's Certificate of Incorporation and its
Bylaws, which adoption and approval was unanimous. This Agreement, assuming the
due authorization, execution and delivery by Acquiror, constitutes a legal,
valid, and binding obligation of the Company enforceable against the Company in
accordance with its terms.
Section 3.5 No Conflicts; Required Filings and Consents.
(a) No Conflict. Except as noted on Schedule 3.5, the
execution and delivery of this Agreement do not, and the performance
by the Company of its obligations under this Agreement will not, (i)
conflict with or violate the Certificate of Incorporation or Bylaws of
the Company or the charter or bylaws of any Subsidiary, (ii) conflict
with or violate any law, rule, regulation, order, judgment, or decree
applicable to the Company or any Subsidiary or by which any of their
respective properties are bound or affected, or (iii) result in any
breach of, or constitute a default (or an event that with notice,
lapse of time, or both would become a default) under, or impair the
Company's rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment,
acceleration, or cancellation of, or result in the creation of a Lien
on any of the assets of the Company or any Subsidiary pursuant to, (A)
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any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise, or other instrument or obligation to which
the Company or any Subsidiary is a party, or by which any of their
properties are bound or affected or (B) any judgment, injunction,
writ, award, decree, restriction, ruling, or order of any court,
arbitrator or authority or any applicable constitution, law,
ordinance, rule or regulation, to which the Company or any Subsidiary
is subject, except, in the case of clause (iii) above, for any such
breaches, defaults, or other occurrences that would not, individually
or in the aggregate, have a Material Adverse Effect. Schedule 3.5 sets
forth a list of any consents required under any material Contracts as
a result of the transactions contemplated by this Agreement (whether
or not subject to the exception set forth with respect to clause (iii)
above). The Company will use all reasonable efforts to obtain such
consents prior to the Effective Time.
(b) Required Filings and Consents. The execution and
delivery of this Agreement by the Company do not, and the performance
by the Company of its obligations under this Agreement will not,
require any consent, approval, authorization, registration, or permit
of, or filing with or notification to, any governmental or regulatory
authority, domestic or foreign, except for (i) applicable
requirements, if any, of the Exchange Act, state securities laws, and
the pre-merger notification requirements of the HSR Act, (ii) the
filing of the Certificates of Merger with the Secretaries of State of
the States of Delaware and Missouri, (iii) petitions and applications
to be filed or supplied with, and approvals to be obtained from, the
ILCC and the NYPSC, (iv) as described on Schedule 3.5, and (v) where
the failure to obtain any such consents, approvals, authorizations,
registrations or permits, or to make any such filings or
notifications, would not prevent or delay consummation of the Merger,
and would not, individually or in the aggregate, have a Material
Adverse Effect. The Company makes no representations or warranties as
to whether any petitions or applications are required to be filed
with, or supplied to, or approvals are to be obtained from, the INURC
and the MPSC, other than that, to the best of the Company's knowledge,
no factual circumstances exist which are unknown to Acquiror that
require such petitions or applications to be filed with, or supplied
to, or require approvals to be obtained from the INURC and the MPSC.
Section 3.6 Compliance; Permits.
(a) Compliance. The Company and each Subsidiary has complied
with all applicable laws (including OSHA, zoning, building and similar
laws), rules, regulations, ordinances, codes, judgments and orders,
except for such failures to comply which do not, individually or in
the aggregate, have a Material Adverse Effect and except for
Environmental Laws, which are the subject of the representations and
warranties contained in Section 3.15 hereof. No notice, citation,
summons or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending
or, to the knowledge of the Company, threatened, by any Authority or
other Person with respect to any alleged violation by the Company, any
Subsidiary or any of their respective Affiliates of any law,
ordinance, rule, regulation, code or order of any Authority, except,
in each case, where such violations or failures, individually or in
the aggregate, would not have a Material Adverse Effect.
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(b) Permits. Except as set forth in Schedule 3.6, the
Company and each Subsidiary possesses and is in compliance with all
permits, licenses, variances, exemptions, orders, and approvals (other
than Environmental Permits, which are the subject of the
representations and warranties contained in Section 3.15 hereof)
("Permits") required to operate its business as presently operated and
to own, lease or otherwise hold its assets under all applicable laws,
rules, regulations, ordinances and codes, except to the extent that
any failure to possess, or to comply with, any Permit would not,
individually or in the aggregate, have a Material Adverse Effect.
Except as set forth in Schedule 3.6, all Permits of the Company and
the Subsidiaries are in full force and effect, other than those the
failure of which to be in full force and effect would not individually
or in the aggregate have a Material Adverse Effect, and there are no
proceedings pending or, to the Company's knowledge, threatened that
seek the revocation, cancellation, suspension or any adverse
modification of any such Permits presently possessed by the Company or
any Subsidiary, or with respect to the failure by the Company, any
Subsidiary or any of their respective Affiliates to have any Permit
required in connection with the conduct of its business or otherwise
applicable to its business, other than those revocations,
cancellations, suspensions, modifications or failures which do not
individually or in the aggregate have a Material Adverse Effect.
Section 3.7 Financial Statements. The books of account and related
records of the Company and the Subsidiaries fairly reflect in reasonable detail
their respective assets, liabilities and transactions in accordance with GAAP
applied on a consistent basis. Attached as Schedule 3.7 are the following
financial statements (such financial statements together with any financial
statements delivered in accordance with Section 5.8 being collectively, the
"Financial Statements"):
(i) Consolidated and consolidating balance sheets at
December 31, 1997, 1996 and 1995, the related
consolidated retained earnings and cash flows of the
Company and the Subsidiaries for the years then ended,
and related consolidated and consolidating statements
of income for the years then ended.
(ii) Consolidated and consolidating balance sheet at
September 30, 1998 and the related consolidated and
consolidating statements of income and retained
earnings of the Company and the Subsidiaries for the
nine-month period then ended, and
(iii)Consolidated and consolidating balance sheets at March
31, 1997, June 30, 1997, September 30, 1997, March 31,
1998, June 30, 1998 and September 30, 1998, the related
consolidated statements of income and retained earnings
of the Company and the Subsidiaries for each
three-month period then ended, and the consolidated and
consolidating statements of income of the Company and
the Subsidiaries for each year-to-date period then
ended.
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The Financial Statements: (a) are in all material respects in accordance with
the books and records of the Company and the Subsidiaries, (b) fairly present in
all material respects the financial condition, assets and liabilities of the
Company and the Subsidiaries as at their respective dates and the results of
their operations and cash flows for the periods covered thereby and (c) have
been prepared in accordance with GAAP consistently applied, except as otherwise
stated therein and that the Financial Statements listed in clause (ii) above are
subject to normal and recurring year-end adjustments that were not or are not
expected to be material in amount. The Financial Statements for the years ended
December 31, 1997, 1996 and 1995 have been audited by PricewaterhouseCoopers LLP
(formerly Coopers & ▇▇▇▇▇▇▇ L.L.P.), the independent certified public
accountants for the Company and the Subsidiaries. All references in this
Agreement to the "Balance Sheet" shall mean the consolidated balance sheet of
the Company and the Subsidiaries as at December 31, 1997 included in the
Financial Statements and all references to the "Balance Sheet Date" shall mean
December 31, 1997.
Section 3.8 Absence of Certain Changes or Events. Since the Balance
Sheet Date, the Company and each Subsidiary has conducted its business only in
the ordinary course of business consistent with past practice, other than in the
pursuit of the sale of the Company. Without limiting the foregoing, since the
Balance Sheet Date, except as disclosed on Schedule 3.8, there has not been any
Material Adverse Effect involving the Company and the Subsidiaries, and (ii)
there has not occurred any material events of the types set forth in clauses (a)
through (s) of Section 5.1.
Section 3.9 Absence of Litigation. Except as disclosed on Schedule
3.9(a), there are no actions, suits, investigations or proceedings pending
against or, to the Company's knowledge, threatened against or affecting, the
Company, any Subsidiary or their respective businesses or assets before any
court or arbitrator or administrative, governmental, or regulatory authority,
domestic or foreign (each, an "Authority"), which to the extent not covered by
insurance, individually or in the aggregate, asserts claims, or is reasonably
likely to result in recoveries, in excess of $250,000. Except as disclosed on
Schedule 3.9, there are currently no outstanding judgments, decrees or orders of
any court or Authority against the Company or any Subsidiary. There are no
unsatisfied judgments, or outstanding decrees, injunctions or orders of any
governmental entity or arbitrator against the Company or any Subsidiary that
have had or are likely to have a Material Adverse Effect.
Section 3.10 Benefit Plans.
(a) Schedule 3.10 contains a true and correct list
(designated as "salaried," "hourly" or "both" depending on how
participants therein are compensated) of each "employee benefit plan,"
as defined in Section 3(3) of ERISA (including any "multiemployer
plan" as defined in Section 3(37) of ERISA), bonus, incentive,
deferred compensation, excess benefit, employment contract, stock
purchase, stock ownership, stock option, supplemental unemployment,
vacation, sabbatical, sick-day, severance or other material employee
benefit plan, program or arrangement (other than those required to be
maintained by law), whether written or unwritten, qualified or
nonqualified, funded or unfunded, foreign or domestic, (i) maintained
- 14 -
by, or contributed to by the Company, any Subsidiary or any of their
respective Affiliates, in respect of any employee or former employee,
or (ii) with respect to which the Company, any Subsidiary or any of
their respective Affiliates has any liability in respect of any
employee or former employee (the "Benefit Plans"). Neither the
Company, any Subsidiary nor any of their respective Affiliates
maintains any benefit plan, program or arrangement, including any
deferred compensation arrangement, for directors, consultants or
independent contractors.
(b) A true and complete copy of each Benefit Plan and
related trust agreements and (to the extent applicable) a copy of each
Benefit Plan's current summary plan description and in the case of an
unwritten Benefit Plan, a written description thereof, has been
furnished to Acquiror. In addition, to the extent applicable, the
Company has provided to Acquiror a copy of the most recent Internal
Revenue Service ("IRS") determination letter issued to each Benefit
Plan and a copy of the most recent IRS Form 5500 together with all
schedules, actuarial reports and accountants' statement filed on
behalf of each Benefit Plan.
(c) Each Benefit Plan which is intended to be qualified
under Section 401(a) of the Code (as designated on Schedule 3.10) is
so qualified and any trust forming a part of such a Benefit Plan is
tax exempt under Section 501(a) of the Code.
(d) Each Benefit Plan has been operated and administered in
accordance with its terms and is in compliance in all material
respects with applicable laws, including ERISA and the Code.
(e) No asset of the Company, any Subsidiary or any of their
respective Affiliates which is to be acquired by Acquiror pursuant to
this Agreement is subject to a Lien or Tax under the Code or ERISA.
(f) Neither the Company, any Subsidiary nor any ERISA
Affiliate and, to the knowledge of the Company, no other Person, has
taken any action or failed to take any action with respect to any
Benefit Plan that may subject Acquiror or any Benefit Plan to any
liability or Tax under the Code or ERISA.
(g) Neither the Company, any Subsidiary nor any ERISA
Affiliate have incurred or expect to incur any withdrawal liability
with respect to any Benefit Plan, including (1) any contingent
liability under ERISA '4204 or (2) any withdrawal liability arising
from the actions of the Company, any Subsidiary or any ERISA Affiliate
contemplated by this Agreement. All contributions that the Company,
any Subsidiary or any ERISA Affiliate have been obliged to make to any
Benefit Plan, including any multiemployer plan, have been duly and
timely made.
(h) Except as disclosed on Schedule 3.9(a), there are no
pending or, to the knowledge of the Company, threatened claims (other
than routine claims for benefits), assessments, complaints,
proceedings or investigations of any kind in any court or governmental
agency with respect to any Benefit Plan.
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(i) Except as disclosed with particularity on Schedule 3.10,
no Benefit Plan provides benefits, including without limitation, death
or medical benefits, beyond termination of service or retirement other
than (i) coverage mandated by law, or (ii) death or retirement
benefits under a Benefit Plan qualified under Section 401(a) of the
Code.
(j) With respect to each Benefit Plan that is a "group
health plan" within the meaning of Section 607 of ERISA and that is
subject to Section 4980B of the Code, the Company, each Subsidiary and
each ERISA Affiliate have complied in all material respects with the
continuation coverage requirements of the Code and ERISA.
(k) At no time since September 2, 1974 has the Company or
any ERISA Affiliate incurred any liability under Section 4062, 4063 or
4064 of ERISA that remains unsatisfied.
(l) Except as listed on Schedule 3.10, no payment which is
or may be made by Company or any ERISA Affiliate or from any Benefit
Plan, to any employee, former employee, director or agent of Company
or any ERISA Affiliate under the terms of any Benefit Plan, either
alone or in conjunction with any other payment, will or could be
characterized as an excess parachute payment under section 280G of the
Code.
(m) Set forth on Schedule 3.10 is a list of the most
recently available, as of the date of this Agreement, actuarial
reports for the Pension, Supplemental Pension Plan and Post-retirement
health and death benefits of the Company and each Subsidiary, copies
of which have been provided to Acquiror.
Section 3.11 Labor Matters.
(a) Except as disclosed on Schedule 3.11, (i) no employee of
the Company or any Subsidiary is represented by any union or other
labor organization; (ii) there is no unfair labor practice charge
pending or, to the knowledge of the Company threatened against the
Company or any Subsidiary relating to any of the employees or former
employees of the Company or any Subsidiary; (iii) there are no
negotiations or strikes, disputes, slow downs or stoppages relating to
any of the employees of the Company or any Subsidiary pending or, to
the knowledge of the Company, threatened against or involving
employees or business of the Company or any Subsidiary; (iv) no labor
grievance relating to any of the employees or former employees of the
Company or any Subsidiary is pending; and (v) neither the Company nor
any Subsidiary has in the past three years experienced any work
stoppage or other labor difficulty or organizational activity relating
to any of the employees or the business of the Company or any
Subsidiary.
(b) There are no pending claims against the Company or any
Subsidiary (whether under federal or state law, employment agreements
or otherwise) asserted by any employee or former employee of the
Company or any Subsidiary on account of or for (i) overtime pay, other
than overtime pay for work done during the current payroll period;
(ii) wages or salary for any period other than the current payroll
period; (iii) any amount of vacation or sabbatical pay or pay in lieu
- 16 -
of vacation or time off; or (iv) any violation of any statute,
ordinance or regulation relating to minimum wages or maximum hours at
work. To the Company's knowledge, there are no such claims which have
not been so asserted.
Section 3.12 Taxes.
(a) (i) All federal, state and material local income Tax
returns and similar reports (including information returns and similar
reports) required to be filed with any Taxing Authority by or on
behalf of the Company or any Subsidiary (collectively, the "Returns"),
have been filed when due in accordance with all applicable laws
(including any extensions of such due date); (ii) as of the time of
filing, the Returns correctly reflected in all material respects the
income (or other measure or Tax) and any other information required to
be shown therein; (iii) the Company and the Subsidiaries have timely
paid, withheld or made provision for all Taxes shown as due and
payable on the Returns that have been filed and any other Taxes for
which notice of assessment or demand for payment has been received by
the Company or a Subsidiary; (iv) the charges, accruals, and reserves
for Taxes with respect to the Company and the Subsidiaries contained
in the Balance Sheet are adequate, in all material respects, to cover
all liabilities for Taxes of the Company and the Subsidiaries for
periods ending on or before December 31, 1997, and nothing has
occurred subsequent to that date to make any of such accruals
inadequate; (v) all material Taxes for periods after December 31, 1997
have been paid or are adequately reserved against on the books of the
Company and the Subsidiaries; (vi) Schedule 3.12(a) contains a list of
the taxable years through which the Returns of the Company and the
Subsidiaries have been examined or closed; (vii) neither the Company
nor any Subsidiary has requested any extension of time within which to
file or send any Return, which Return has not since been filed or sent
or, to its knowledge, is delinquent in the payment of any Tax; (viii)
neither the Company nor any Subsidiary has granted any extension or
waiver of the limitation period applicable to any Returns; (ix) except
as disclosed on Schedule 3.12(a), neither the Company nor any
Subsidiary is currently the subject of any audit or examination
relating to Taxes and there are no pending or, to its knowledge,
threatened claims against or with respect to the Company or any
Subsidiary in respect of any Tax or assessment; (x) there are no Liens
for Taxes upon the assets of the Company or any Subsidiary except
Liens for current Taxes not yet due; (xi) except as disclosed on
Schedule 3.12(a) since 1984, neither the Company nor any Subsidiary
has ever been a member of an affiliated group of corporations filing
consolidated federal income tax returns other than a group of which
the Company is the common parent; (xii) neither the Company nor any
Subsidiary is a party to a tax sharing or tax allocation agreement or
arrangement pursuant (other than obligations to pay real property or
personal property taxes of a lessee under lease agreements) to which
it could be liable for the Taxes of another person other than the
Company or a Subsidiary; (xiii) no written claim has been made by a
Taxing Authority in a jurisdiction where the Company or a Subsidiary
does not file Tax returns that the Company or such Subsidiary is or
may be subject to taxation in that jurisdiction; (xiv) neither the
Company nor any Subsidiary has made a consent election under Section
341(f) of the Code; (xv) except as disclosed in Schedule 3.12(a)
neither the Company nor any Subsidiary (a) has received a ruling with
respect to Taxes from a Taxing Authority, (b) is a party to a closing
- 17 -
agreement with any Taxing Authority, or (c) has agreed to make or is
required to make an adjustment under Section 481 of the Code by reason
of a change in accounting method or otherwise that has continuing
effect; and (xvi) neither the Company nor any Subsidiary owns an
interest in any entity or is a party to any agreement that is treated
as a partnership for federal income tax purposes. Capitalized terms
used in this Section 3.12(a) and not defined elsewhere in this
Agreement have the meanings assigned to them in Section 3.12(c).
(b) Schedule 3.12(b) contains a list of states and local
jurisdictions in which the Company or any Subsidiary is liable for
filing returns for any income, sales or use tax. True and complete
copies of federal and state income tax returns of the Company and the
Subsidiaries for the taxable periods ended December 31, 1993 through
December 31, 1997 have been delivered to Acquiror.
(c) For the purposes of this Agreement, the following terms
have the following meanings:
"Tax" (and, with correlative meaning, "Taxes" and "Taxable") means (i)
any net income, alternative or add-on minimum tax, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license, withholding on
amounts paid to or by the Company or any Subsidiary, payroll, employment,
excise, severance, stamp, occupation, premium, property, environmental, or
windfall profit tax, custom, duty, or other tax, governmental fee, or other like
assessment or charge of any kind whatsoever, together with any interest or any
penalty, addition to tax, or additional amount imposed by any governmental
authority (a "Taxing Authority") responsible for the imposition of any such tax
(domestic or foreign), (ii) liability of the Company or any Subsidiary for the
payment of any amounts of the type described in clause (i) as a result of being
a member of an affiliated, consolidated, combined, or unitary group for any
Taxable period, and (iii) liability of the Company or any Subsidiary for the
payment of any amounts of the type described in clause (i) or (ii) as a result
of any express or implied obligation to indemnify any other Person or as a
result of the Company or a Subsidiary being the successor to another Person by
merger, liquidation or otherwise.
Section 3.13 Real Estate.
(a) Schedule 3.13(a) sets forth a summary description of the
Real Property owned by the Company and the Subsidiaries and identifies
any known conflicts between the present or contemplated use of any
such Real Property and the current zoning of such Real Property. All
structures and other improvements on such Real Property are within the
lot lines and do not encroach on the properties of any other Person,
except for such encroachments as would not individually or in the
aggregate have a Material Adverse Effect. The Company and the
Subsidiaries own, lease or possess sufficient rights of use with
respect to all Real Estate necessary to continue to operate their
business as currently conducted, in all material respects. Except as
shown on Schedule 3.13(a) and except for property taxes due by year
end, as of the date hereof, neither the Company nor any Subsidiary has
received any written or oral notice for assessments for public
improvements against the Real Property which remains unpaid, and to
the knowledge of the Company, no such assessment has been proposed.
- 18 -
Except as set forth on Schedule 3.13(a), there is no pending
condemnation, expropriation, eminent domain or similar proceeding
affecting all or any portion of any of the Real Estate and to the
Company's knowledge, no such proceeding is threatened.
(b) The Company and each Subsidiary has obtained all
authorizations, Permits, easements, and rights of way ("Access
Rights"), which are necessary to ensure continued uninterrupted (1)
vehicular and pedestrian ingress and egress to and from the Real
Estate and (2) continued use, operation, maintenance, repair and
replacement of all existing and currently committed water lines used
by the Company and each Subsidiary in connection with their respective
businesses, except as would not individually or in the aggregate have
a Material Adverse Effect. All Access Rights are in full force and
effect, except as would not individually or in the aggregate have a
Material Adverse Effect. Except as set forth in Schedule 3.13(b), and
except for such breaches which, individually or in the aggregate, do
not have a Material Adverse Effect, none of the Subsidiaries are in
breach or default under the easement rights and rights of way enjoyed
by the Company or the Subsidiaries, and to the knowledge of the
Company, none of the grantors of such rights are in breach or default
thereunder. There are no restrictions on entrance to or exit from the
Real Estate to adjacent public streets, and no conditions exist which
will or with the giving of notice, the passage of time or both, could
reasonably be expected to have a Material Adverse Effect.
(c) Except as disclosed in Schedule 3.13(c), neither the
Company nor any Subsidiary has received any notices, oral or written,
from any Authority that the assessed value of the Real Estate has been
determined to be greater than that upon which county, township or
school tax was paid for the 1997 tax year applicable to each such tax,
or that any municipal assessment has been proposed by any Authority
affecting the Real Estate or from any insurance carrier of the
Company, any Subsidiary or its Affiliates of fire hazards with respect
to the Real Estate, except where such increased assessed value or
municipal assessment would not have a Material Adverse Effect.
(d) As of the Effective Time, the Real Estate will be
adequate to operate the businesses of the Company and the Subsidiaries
consistent with past practice.
Section 3.14 Title to Property. The Company and the Subsidiaries
have good and marketable title to all of their Real Property and tangible
personal property, free and clear of all Liens, except for (a) Liens set forth
on Schedule 3.14 hereto, (b) Liens securing Taxes, assessments, governmental
charges or levies, or the claims of materialmen, mechanics, carriers and like
Persons, all of which are not yet due and payable or which are being contested
in good faith or (c) for such other Liens which do not, individually or in the
aggregate, materially affect the use of the properties and assets subject
thereto or affected thereby or otherwise materially impair or interfere with the
operation of the businesses of the Company or the Subsidiaries, as such
businesses are presently and ordinarily conducted (collectively, the "Permitted
Exceptions"). Except as set forth on Schedule 3.14, the Company or the
Subsidiaries is the lessee of all leasehold estates which are material to its
business and is in possession of the properties purported to be leased
- 19 -
thereunder, and each such lease is valid without material default thereunder by
the lessee or, to the Company's knowledge, the lessor.
Section 3.15 Environmental Matters.
(a) (i) The Company and each Subsidiary holds and, except as
set forth on Schedule 3.15(a), is in compliance with all environmental
permits, certificates, licenses, approvals, registrations,
authorizations and consents or other settlement agreements
("Environmental Permits") required under all environmental laws,
rules, regulations, orders, ordinances or codes in connection with its
business (which shall include for purposes of this Section 3.15 any
predecessor operations of the business) except as would not have a
Material Adverse Effect, and all of such Environmental Permits are in
full force and effect, except as would not have a Material Adverse
Effect. All such Environmental Permits are listed on Schedule 3.15(a).
If any Environmental Permits are required to be transferred, reissued
or modified, or if consent, approval, authorization or notification is
required with respect to any such Environmental Permit as a result of
the Merger, the parties hereto will, in accordance with Section 6.2,
use all reasonable efforts to obtain, or cause to be obtained, the
transfer, reissuance or modification of such Environmental Permits.
The Company and each Subsidiary has complied with the applicable
environmental statutes, rules, regulations, ordinances and orders of
any Authority and the common law, including those relating to
Hazardous Substances, in connection with its respective business
(collectively, "Environmental Laws"), except as would not have a
Material Adverse Effect.
(ii) The Company and each Subsidiary has made timely
application for renewals of all such Environmental
Permits for which applications or renewals are required
on or before the Effective Time for such Environmental
Permits to remain in full force and effect after the
Effective Time, except for such Environmental Permits
which by their terms or by operation of law renewal
application need not be made before the Effective Time
to remain in full force and effect after the Effective
Time.
(b) (i) The Company and each Subsidiary (including for
purposes of Section 3.15(b) and (c), Affiliates and predecessors of
the Company and the Subsidiaries) is and, except as set forth in
Schedule 3.15(b), has been for the past ten years in full compliance
with all federal and state primary and secondary drinking water
standards, except as would not have a Material Adverse Effect.
(ii) As to all past violations of state or federal
drinking water standards, the Company and each
Subsidiary has completed in accordance with all
applicable deadlines, all actions required by
Environmental Law or Authorities to correct or
otherwise respond to such violations.
(c) In connection with the Company and each Subsidiary:
(i) Except as disclosed on Schedule 3.15(c), no
notice, citation, summons or order has been
issued, no complaint has been filed, no penalty
has been assessed and no investigation or review
is pending or threatened by any Authority or other
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Person: (A) with respect to any alleged violation
of any Environmental Law; or (B) with respect to
any alleged failure to have any Environmental
Permit required; or (C) which seeks the
modification, suspension, revocation or
cancellation of any Environmental Permit; or (D)
with respect to any use, possession, handling,
generation, treatment, storage, recycling,
transportation or disposal (collectively
"Management" or "Manage") of any hazardous, toxic
or polluting substance or waste or contaminant,
including petroleum products, polychlorinated
biphenyls ("PCBs") and radioactive materials
("Hazardous Substances").
(ii) Except as disclosed on Schedule 3.15(c), none of
the Company or the Subsidiaries (including for
purposes of this Section 3.15(c), Affiliates and
predecessors of the Company and the Subsidiaries)
has received any request for information, notice
of claim, demand or notification that any of them
is or may be potentially responsible with respect
to any investigation or clean-up of any threatened
or actual Release of any Hazardous Substance.
(iii) Except as set forth on Schedule 3.15(c), none of
the Company or the Subsidiaries has used,
generated, treated, stored, recycled or disposed
of any "hazardous wastes" (as defined by the
Resource Conservation Recovery Act of 1980, as
amended from time to time ("RCRA")) on any
property now or previously owned, or leased by the
Company or the Subsidiaries in quantities or for
time periods that require or, at the time of such
activity, would have required a permit or
authorization under RCRA or under any other
Environmental Law, nor has anyone so treated,
stored, recycled or disposed of any such hazardous
wastes so as to require such a permit, or in a
manner so as to require remediation or other
response action under Environmental Laws, on any
Real Property now or previously owned, used or
leased by the Company or any Subsidiary during the
period of such ownership, use or lease.
(iv) Except as disclosed on Schedule 3.15(c), no PCBs
or asbestos-containing materials are or have been
present at any Real Property, nor are there any
underground storage tanks, active or abandoned, at
any Real Property and no such asbestos containing
materials listed in Schedule 3.15(c) is friable
and in a condition which currently requires
removal and/or other abatement or response action
under Environmental Laws or OSHA. Except as
disclosed in Schedule 3.15(c), all active
underground storage tanks ("USTs") that are
regulated by RCRA and/or similar state laws have
been upgraded to meet all applicable standards
under such laws, through December 31, 1998, and
all USTs that have been abandoned and/or removed
have been so abandoned or removed in compliance
with all then applicable Environmental Laws and
currently require no further remediation or other
response action under such Environmental Laws.
(v) No Hazardous Substance generated by the Company or
any Subsidiary has been recycled, treated, stored,
disposed of or transported by any entity other
than those listed on Schedule 3.15(c) hereof.
(vi) Except as disclosed on Schedule 3.15(c), no
Hazardous Substance Managed by the Company or any
Subsidiary has come to be located at any site
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which is listed or proposed for listing under the
Comprehensive Environmental Response, Compensation
and Liability of Act of 1980, as amended from time
to time, ("CERCLA"), the Comprehensive
Environmental Response, Compensation and Liability
Information System ("CERCLIS") or on any similar
state list, or which is the subject of federal,
state or local enforcement actions or other
investigations which may lead to claims against
the Company or any Subsidiary or Acquiror or the
Surviving Corporation for clean-up costs, remedial
work, damages to natural resources or for personal
injury claims, including, but not limited to,
claims under CERCLA. Neither the Company nor any
Subsidiary has received any request for
information, notice of claim, demand or
notification that any of them is or may be
responsible with respect to any investigation or
clean-up at any site listed on Schedule 3.15(c).
(vii) Except as disclosed on Schedule 3.15(c), no
Hazardous Substance has been released, spilled,
leaked, discharged, disposed of, pumped, poured,
emitted, emptied, injected, leached, dumped or
allowed to escape ("Released") at, on, about or
under any Real Property, and except as disclosed
on Schedule 3.15(c), no Hazardous Substance has
been Released by the Company or any Subsidiary on
any other property, except as would not have a
Material Adverse Effect.
(viii) Except as disclosed on Schedule 3.15(c), no oral
or written notification of a Release or threat of
Release of a Hazardous Substance has been or is
required to be filed by or on behalf of the
Company or any Subsidiary or in relation to any
property now or previously owned, operated or
leased by the Company or any Subsidiary. No such
property is listed or proposed for listing on the
National Priority List promulgated pursuant to
CERCLA, on CERCLIS or on any similar state list of
sites requiring investigation or clean-up.
(ix) There are no environmental Liens on any properties
owned or leased by the Company or any Subsidiary,
and no government actions have been taken or are
in process or pending which could subject any of
such properties to such Liens.
(x) Except as disclosed on Schedule 3.15(c), none of
the Company or the Subsidiaries will be required
to place any notice or restriction relating to the
presence or a Release of Hazardous Substances in
the deed to any Real Property or in any written
instrument relating to such property, and no Real
Property has such a notice or restriction in its
deed or any other written instrument.
(xi) Except as heretofore provided to Acquiror, there
have been no environmental inspections,
investigations, studies, audits, tests, reviews or
other analyses conducted by or on behalf of the
Company or any Subsidiary or any of their
respective representatives, lenders or advisors in
relation to any property or business now or
previously owned, operated, or leased by the
Company or any Subsidiary ("Environmental
Reports"), and all such Environmental Reports are
listed on Schedule 3.15(c)(xi).
Section 3.16 Contracts. Schedule 3.16 contains a list of all notes,
bonds, mortgages, indentures, contracts, agreements, leases, licenses,
franchises and other instruments or contractual obligations to which the Company
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or any Subsidiary is a party or by which any of their respective properties is
bound or affected ("Contracts") (other than with respect to which the Company's
or any Subsidiary's total liability or expense is less than $100,000 per such
Contract, but in any event including all indentures and other documents
evidencing indebtedness for borrowed money) that exist as of the date hereof.
The Company has delivered to Acquiror a correct and complete copy of each
written agreement listed on Schedule 3.16. Except as disclosed on Schedule 3.16,
with respect to each Contract, neither the Company or any Subsidiary nor, to the
Company's knowledge, any other party thereto, is in breach or default, and no
event has occurred which with notice or lapse of time would constitute a breach
or default, or permit termination, modification, or acceleration, under the
agreement, such breaches, terminations, modifications, accelerations or defaults
which, individually or in the aggregate, do not have a Material Adverse Effect.
Except as set forth on Schedule 3.16, there are no disputes pending or to the
Company's knowledge, threatened, under or in respect of any of the Contracts,
other than those that individually and in the aggregate do not have a Material
Adverse Effect. Except as set forth on Schedule 3.16, there are no Contracts
that restrict the Company's ability to sell, assign or otherwise transfer any of
its telecommunications, sugar or similar investments, in whole or in part.
Section 3.17 Brokers. No broker, finder, or investment banker is
entitled to any brokerage, finder's, or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.
Section 3.18 Intellectual Property.
(a) Set forth on Schedule 3.18(a) is a list of all
registered trademarks, servicemarks, copyrights, or patents, and
applications therefor, which are owned or used by the Company. The
Company owns, leases or licenses free and clear of all security
interests, liens, pledges, or other encumbrances on, all intellectual
property necessary to conduct the business of the Company and the
Subsidiaries in the ordinary course consistent with past practice
(except for encumbrances in favor of lessors and licensors under the
applicable lease and license agreements). None of the Intellectual
Property Rights is used pursuant to a license from a third party or
licensed to a third party, except for ordinary commercial software
that has been identified on Schedule 3.18(a).
(b) Except as set forth on Schedule 3.18(b), (i) there has
been no claim made against the Company or any of its Subsidiaries
asserting the invalidity, misuse or unenforceability of any of the
Intellectual Property Rights, (ii) the Company is not aware of any
infringement or misappropriation of any of the Intellectual Property
Rights; and (iii) the Company has not infringed or misappropriated any
intellectual property or proprietary right of any other entity.
Section 3.19 Accounts Receivable. The accounts receivable of the
Company and the Subsidiaries as set forth on the Balance Sheet or arising since
the date thereof are valid and genuine and have arisen solely out of bona fide
sales and deliveries of goods, performance of services and other business
-23-
transactions in the ordinary course of business consistent with past practice.
The allowance for collection losses on the Balance Sheet has been determined in
accordance with GAAP consistent with past practice.
Section 3.20 Undisclosed Liabilities. Except as disclosed on
Schedule 3.20, neither the Company nor any Subsidiary has any liabilities,
either direct or indirect, matured or unmatured or absolute, contingent or
otherwise, except:
(a) those liabilities set forth on the Balance Sheet and not
heretofore paid or discharged;
(b) liabilities arising in the ordinary course of business
under any Contract;
(c) those liabilities incurred, consistently with past
business practice, in or as a result of the ordinary course of
business since the Balance Sheet Date and reflected in the books and
records of the Company or any Subsidiary; and
(d) liabilities that would not have a Material Adverse
Effect.
Section 3.21 Product Liability. Except as disclosed on Schedule
3.21, there are no (a) liabilities of the Company or any Subsidiary, fixed or
contingent, asserted or, to the knowledge of the Company, unasserted, with
respect to any product liability or similar claim that relates to any product or
service sold by the Company or any Subsidiary to others or (b) liabilities of
the Company or any Subsidiary, fixed or contingent, asserted or, to the
knowledge of the Company unasserted, with respect to any claim for the breach of
any express or implied product warranty or a similar claim with respect to any
product or service sold by Company or any Subsidiary to others.
Section 3.22 Supply of Utilities. Except as set forth on Schedule
3.22, the Real Estate has adequate arrangements for supplies of electricity,
gas, oil, coal and sewer for all operations at the 1997 or current operating
levels, whichever is greater. Except as set forth on Schedule 3.22, there are no
actions or proceedings pending or, to the Company's knowledge, threatened that
would adversely affect the supply of electricity, gas, coal or sewer to the Real
Estate.
Section 3.23 Insurance. Schedule 3.23 lists the Company's and each
Subsidiary's policies and contracts in effect as of the date hereof for
insurance covering the assets and properties and the operation of the facilities
constituting the business owned or held by the Company or such Subsidiary,
together with the risks insured against, coverage limits, deductible amounts,
all outstanding claims thereunder and whether the terms of each such policy
provide for retrospective premium adjustments. Such policies include replacement
value property and casualty insurance and cover damage, accident, casualty and
acts of God in the amounts set forth on Schedule 3.23, which amounts are
adequate to pay the replacement cost (as of the date hereof) of any asset or
- 24 -
property. The consummation of the transactions contemplated by this Agreement
will not result in a termination of such insurance.
Section 3.24 Relationships with Customers and Suppliers. The Company
does not know of any written or oral communication, fact, event or action which
exists or has occurred within six months prior to the date of this Agreement,
which would lead the Company or any Subsidiary reasonably to believe that any
current customer which accounted for more than 5% of the net sales of its
business for the immediately preceding 12-month period or any current supplier
to the Company or any Subsidiary of items material to its business, which items
cannot be replaced at comparable cost, will terminate or materially and
adversely modify its business relationship with the Company or such Subsidiary.
Section 3.25 WARN Act. Since the enactment of the WARN Act, neither
the Company or any Subsidiary has effectuated (a) a "plant closing" (as defined
in the WARN Act) affecting any site of employment or one or more facilities or
operating units within any site of employment or facility; or (b) a "mass
layoff" (as defined in the WARN Act) affecting any site of employment or one or
more facilities or operating units within any site of employment or facility;
nor has the Company or any Subsidiary been affected by any transaction or
engaged in layoffs or employment terminations sufficient in number to trigger
application of any similar state or local law. Except as set forth on Schedule
3.25, neither the Company's nor any Subsidiary's employees has suffered an
"employment loss" (as defined in the WARN Act) within six months prior to date
hereof.
Section 3.26 Condition of Assets. Schedule 3.26(a) sets forth all
maintenance and repair costs at any of the facilities of the Company or any
Subsidiary that would exceed $100,000 and are currently anticipated during the
one year immediately following the Effective Time. Except as set forth on
Schedule 3.26(b), the buildings, machinery, equipment, tools, furniture,
improvements and other fixed tangible assets of the Company and the Subsidiaries
are structurally sound and free from known material defects, and in such good
operating condition and repair so as to permit the operation of the Company's or
such Subsidiary's business as presently conducted. The assets and properties of
the Company and the Subsidiaries include all assets, rights, properties and
contracts the use of which is necessary to the continued conduct after the
Effective Time of the Company's and each Subsidiary's business by the Surviving
Corporation substantially in the manner as it is presently conducted.
Section 3.27 Transactions with Related Parties. Except as described
on Schedule 3.27, since January 1, 1995, no Affiliate of the Company or any
Subsidiary (other than the Company or any Subsidiary):
(a) has borrowed money from or loaned money to the Company
or any Subsidiary;
(b) has or has had any contractual or other claims, express
or implied, or of any kind whatsoever against the Company or any
Subsidiary;
- 25 -
(c) has or has had any interest in any property or assets
used by the Company or any Subsidiary in their respective businesses;
or
(d) has engaged in any other transaction with the Company or
any Subsidiary (other than employment relationships on customary terms
previously disclosed to Acquiror).
Section 3.28 Year 2000 Compliance. Except as set forth on Schedule
3.28 or as would not cause a Material Adverse Effect, the information technology
used by the Company and the Subsidiaries (including, software, firmware and
hardware) is designed to be used prior to, during and after the calendar Year
2000 A.D., and such information technology used during each successive time
period will accurately receive, provide and process date/time data (including,
but not limited to, calculating, comparing and sequencing) from, into and
between the 20th and 21st centuries, and leap year calculations, and will not
malfunction, cease to function, or provide invalid or incorrect results as a
result of date/time data, to the extent that other information technology, used
in combination with the information technology used by the Company and the
Subsidiaries, properly exchanges date/time data with it.
Section 3.29 Pooling. Neither the Company nor its Affiliates have
taken or agreed to take any action that would prevent or adversely affect the
ability of the Acquiror from accounting for the business combination to be
effected by the Merger as a pooling-of-interests transaction under Opinion No.
16 "Business Combinations" of the Accounting Principles Board of the American
Institute of Certified Public Accountants, as amended by applicable
pronouncements by the Financial Accounting Standards Board, and all related
published rules, regulations and policies of the Securities and Exchange
Commission (collectively, "APB No. 16").
Section 3.30 Disclosures. To the Company's knowledge, no
representation or warranty made by the Company in this Agreement, nor any
written statement, record, schedule or certificate furnished by the Company to
Acquiror pursuant to this Agreement, contains any untrue statement of a material
fact or omits any material fact necessary to make the statements contained
herein or therein, in the light of the circumstances under which they were made,
not misleading.
Section 3.31 Schedules. The Company has made a good faith effort to
disclose all events, facts, items and circumstances required to be disclosed on
a schedule hereto on the correct schedule hereto.
- 26 -
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents and warrants to the Company that:
Section 4.1 Organization and Qualification. Acquiror is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to own,
lease and operate its business as and where presently being conducted. Acquiror
is duly qualified or licensed as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of the properties owned,
leased, or operated by it or the nature of its activities makes such
qualification or licensing necessary, except where such failure would not have a
Material Adverse Effect.
Section 4.2 Certificate of Incorporation and Bylaws. Acquiror has
heretofore delivered a complete and correct copy of the Certificate of
Incorporation and the Bylaws, each as amended to date, of Acquiror, and such
Certificate of Incorporation and Bylaws, as so delivered, have not been amended,
modified, or rescinded and remain in full force and effect. Acquiror is not in
violation of any of the provisions of its Certificate of Incorporation or
Bylaws.
Section 4.3 Capitalization. As of the date hereof, the authorized
capital stock of Acquiror consists of 300,000,000 shares of Acquiror Common
Stock. As of January 11, 1999, (i) 80,887,789 shares of Acquiror Common Stock
were issued and outstanding, all of which are duly authorized, validly issued,
fully paid, and nonassessable, (ii) no shares of Acquiror Common Stock were held
in the treasury of Acquiror or owned by subsidiaries of Acquiror, and (iii) no
options to acquire shares of Acquiror Common Stock have been granted under
Acquiror's various employee stock option plans. Except as set forth in this
Section 4.3, as of the date hereof, there are no subscriptions, options,
warrants, or other rights, convertible securities, agreements, arrangements, or
commitments of any character relating to the issued or unissued capital stock of
Acquiror to which Acquiror is a party or obligating Acquiror or any of its
wholly-owned subsidiaries to issue or sell any shares of capital stock of, or
other equity interests in, Acquiror.
Section 4.4 Authority Relative to this Agreement. Acquiror has all
corporate power and authority required to execute and deliver this Agreement and
to perform its obligations under this Agreement. The Board of Directors of
Acquiror has approved the Merger and this Agreement. The execution and delivery
of this Agreement by Acquiror, and the performance by Acquiror of its
obligations under this Agreement, have been duly and validly authorized by all
necessary corporate and stockholder action. This Agreement, assuming the due
authorization, execution, and delivery by the Company, constitutes a legal,
valid, and binding obligation of Acquiror enforceable against it in accordance
with its terms.
- 27 -
Section 4.5 No Conflict; Required Filings and Consents.
(a) No Conflict. The execution and delivery of this
Agreement by Acquiror do not, and the performance by Acquiror of its
obligations under this Agreement will not, (i) conflict with or
violate the Certificate of Incorporation or Bylaws of Acquiror (ii)
conflict with or violate any law, rule, regulation, order, judgment,
or decree applicable to Acquiror, or by which its properties are bound
or affected, or (iii) result in any breach of, or constitute a default
(or an event that with notice, lapse of time, or both would become a
default) under, or impair Acquiror's rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration, or cancellation of, or result in
the creation of a Lien on any of the assets of Acquiror pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise, or other instrument or obligation to which
Acquiror is a party, or by which any of its properties or assets are
bound or affected, except, in the case of clause (iii) above, for any
such breaches, defaults, or other occurrences that would not,
individually or in the aggregate, have a Material Adverse Effect.
(b) Required Filings and Consents. The execution and
delivery of this Agreement by Acquiror do not, and the performance by
Acquiror of its obligations under this Agreement will not, require any
consent, approval, authorization, or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or
foreign, or other third party except for (i) applicable requirements,
if any, of the Exchange Act, state securities laws, and the pre-merger
notification requirements of the HSR Act, (ii) the filing of the
Certificates of Merger with the Secretaries of State of the States of
Delaware and Missouri, (iii) petitions and applications to be filed or
supplied with, and approvals to be obtained from, the ILCC and the
NYPSC, and to the extent required, petitions and applications to be
filed or supplied with, and approvals to be obtained from, the INURC
and the MPSC, (iv) as described on Schedule 4.5, and (v) where the
failure to obtain any such consents, approvals, authorizations,
registrations or permits, or to make any such filings or
notifications, would not prevent or delay consummation of the Merger,
and would not, individually or in the aggregate, have a Material
Adverse Effect.
Section 4.6 SEC Filings; Financial Statements.
(a) SEC Filings. Acquiror has filed all forms, reports, and
documents required to be filed with the SEC since December 31, 1995,
and has made available to the Company (i) its Annual Reports on Form
10-K for the fiscal years ended December 31, 1997, 1996 and 1995, (ii)
its Quarterly Reports on Form 10-Q for the periods ended March 31,
1998, June 30, 1998, and September 30, 1998, (iii) all proxy
statements relating to meetings of Acquiror's stockholders (whether
annual or special) held since December 31, 1995, (iv) all other
reports or registration statements (other than Quarterly Reports on
Form 10-Q not referred to in clause (ii) above and registration
statements on Form S-8 relating to employee benefit plans of Acquiror)
filed by Acquiror with the SEC since December 31, 1995, and (v) all
amendments and supplements to these reports and registration
statements filed by Acquiror with the SEC. Acquiror will file with the
SEC and make available to the Company all forms, reports, and
- 28 -
documents required to be filed with the SEC between the date of this
Agreement and the Effective Time. (The forms, reports, and documents
referred to in the two preceding sentences are referred to
collectively as the "Acquiror SEC Reports"). Acquiror SEC Reports
(including, without limitation, any financial statements or schedules
included therein) (i) were and will be prepared in compliance, in all
material respects, with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (ii) did not and will not at the
time of filing (or, if amended, supplemented, or superseded by a
filing prior to the date of this Agreement, on the date of that
filing) 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 the light of the
circumstances under which they were made, not misleading. As of the
date hereof, none of Acquiror's subsidiaries is required to file any
forms, reports, or other documents with the SEC.
(b) Financial Statements. Each of the consolidated financial
statements (including, in each case, any related notes thereto)
contained in the Acquiror SEC Reports was or will be prepared in
accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto),
and each of them does or will present fairly in all material respects
the consolidated financial position of Acquiror and its subsidiaries
at their respective dates and the consolidated results of their
operations and cash flows for the periods indicated, except that the
unaudited interim financial statements included in the Quarterly
Reports on Form 10-Q described in clause (a) above are subject to
normal and recurring year-end adjustments that were not or are not
expected to be material in amount.
Section 4.7 Absence of Certain Changes or Events. Since December 31,
1997, there has been no Material Adverse Effect involving Acquiror and its
subsidiaries, taken as a whole, that was not disclosed in Acquiror SEC Reports
filed prior to the date of this Agreement with the SEC.
Section 4.8 Brokers. No broker, finder, or investment banker is
entitled to any brokerage, finders, or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Acquiror.
Section 4.9. Year 2000 Compliance. Except as set forth on Schedule
4.9 or as would not cause a Material Adverse Effect, the information technology
used by the Acquiror and its subsidiaries (including, software, firmware and
hardware) is designed to be used prior to, during and after the calendar Year
2000 A.D., and such information technology used during each successive time
period will accurately receive, provide and process date/time data (including,
but not limited to, calculating, comparing and sequencing) from, into and
between the 20th and 21st centuries, and leap year calculations, and will not
malfunction, cease to function, or provide invalid or incorrect results as a
result of date/time data, to the extent that other information technology, used
in combination with the information technology used by the Acquiror and its
subsidiaries, properly exchanges date/time data with it.
- 29 -
Section 4.10 Pooling. Neither the Acquiror nor its Affiliates have
taken or agreed to take any action that would prevent or adversely affect the
ability of the Acquiror from accounting for the business combination to be
effected by the Merger as a pooling-of-interests transaction under APB No. 16.
Section 4.11. Disclosures. To the Acquiror's knowledge, no
representation or warranty made by the Acquiror in this Agreement, nor any
written statement, record, schedule, report or certificate furnished by the
Acquiror to the Company pursuant to this Agreement, contains any untrue
statement of a material fact or omits any material fact necessary to make the
statements contained herein or therein, in the light of the circumstances under
which they were made, not misleading.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1 Conduct of Business by the Company Pending the Merger.
Between the date of this Agreement and the Effective Time, unless Acquiror
otherwise agrees in writing, the Company will conduct its business, and will
cause the businesses of the Subsidiaries to be conducted only in, and the
Company and the Subsidiaries will not take any action except in, the ordinary
course of business in a manner consistent with past practices. During the
foregoing period, the Company will use all reasonable efforts to preserve intact
the business organization of the Company and the Subsidiaries; to keep available
the services of the present officers, employees, and agents of the Company and
the Subsidiaries (except with respect to such Persons as Acquiror shall advise
the Company); and to preserve the present relationships of the Company and the
Subsidiaries with customers, suppliers, and other Persons with which the Company
or any Subsidiary has significant business relations. The Company shall promptly
inform Acquiror in writing of any specific event or circumstance of which it is
aware, or of which it receives notice, that has or is likely to have,
individually or in the aggregate, taken together with the other events or
circumstances, a material adverse effect on the current or future earnings of
the Company or any Subsidiary, or which constitute a breach of any
representations or warranties set forth in Article III hereof. By way of
amplification and not limitation, except as contemplated by this Agreement,
neither the Company nor any Subsidiary will, between the date of this Agreement
and the Effective Time, directly or indirectly do, any of the following without
the prior written consent of Acquiror, which consent shall not be unreasonably
withheld:
(a) amend or otherwise change the Certificate of
Incorporation or Bylaws (or similar organizational documents) of the
Company or any of the Subsidiaries;
(b) sell, encumber, pledge, or otherwise dispose of any
material operating or investment assets of the Company or any of the
Subsidiaries, except for sales of assets in the ordinary course of
business consistent with past practices;
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(c) issue, sell, pledge, dispose of, or encumber, or
authorize the issuance, sale, pledge, disposition, or encumbrance of,
any shares of capital stock of, any options (including employee stock
options), warrants, convertible securities, or other rights to acquire
any shares of capital stock of, or any other ownership interest in,
the Company or any of the Subsidiaries, or otherwise alter its capital
structure;
(d) (i) declare, set aside, or pay any dividend or other
distribution (whether in cash, stock, property, or any combination
thereof) in respect of any of its capital stock, except that (A) the
Company may pay regular quarterly dividends that are declared and paid
in a manner consistent with past practices at a rate not to exceed
$1.47 per Company Common Share per quarter prior to and including the
quarter ended March 31, 1999, and $1.53 per Company Common Share per
quarter following such quarter [(other than any calendar quarter in
which stockholders of the Company will also be entitled to a dividend
in respect of the Acquiror Common Stock)], and (B) any direct or
indirect wholly-owned Subsidiary of the Company may declare and pay a
dividend to its parent, or (ii) amend the terms of, repurchase,
redeem, or otherwise acquire, or permit any subsidiary to amend the
terms of, repurchase, redeem, or otherwise acquire, any of its capital
stock, or propose to do any of the foregoing;
(e) amend the terms of, split, combine, or reclassify any of
its capital stock or issue, or authorize or propose the issuance of,
any other securities in respect of, in lieu of, or in substitution for
shares of its capital stock;
(f) acquire (by merger, purchase of stock or assets, joint
venture, or otherwise) any corporation, partnership, or other business
organization or division thereof;
(g) except as set forth on Schedule 5.1, (i) incur any
indebtedness for borrowed money, or issue any debt securities, other
than pursuant to its existing line of credit in the ordinary course of
business consistent with past practices or in an aggregate additional
principal amount that does not exceed $1,000,000; (ii) assume,
guarantee (other than the guarantee of indebtedness of the
Subsidiaries for borrowed money), endorse (other than the endorsement
of checks and other drafts for collection), or otherwise as an
accommodation become responsible for, the obligations of any Person,
except in the ordinary course of business consistent with past
practices; (iii) enter into any credit facility or commitment that is
not terminable without the payment of penalty or premium or is not
entered into in the ordinary course of business consistent with past
practices; or (iv) make any loans or advances, except in the ordinary
course of business consistent with past practices;
(h) authorize any capital expenditures other than those
contained in the 1998 and 1999 capital budgets provided to Acquiror
that are, in the aggregate, in excess of $1,000,000 for the Company
and the Subsidiaries taken as a whole (provided that the Company shall
consult with Acquiror prior to making any unbudgeted capital
expenditure in excess of $500,000);
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(i) except as expressly contemplated by Section 6.7(a) of
this Agreement, make any change in the salaries or other compensation
payable or to become payable to, or any advance (excluding advances
for ordinary business expenses) or loan to, any employee, or material
change or material addition to, or material modification of, other
benefits (including any bonus, profit-sharing, pension or other plan
in which any of the employees participate) to which any of the
employees may be entitled, or any payments to any pension, retirement,
profit-sharing, bonus or similar plan other than in any such case (i)
in the ordinary course consistent with past practice, (ii) increases
in compensation required by the terms of existing employment
agreements or other binding commitments that have been disclosed on
Schedule 3.16, (iii) as required by law, or (iv) as required by the
collective bargaining agreements listed as such on Schedule 3.16
hereto (the "Collective Bargaining Agreements");
(j) except as expressly contemplated by Section 6.7(a) of
this Agreement (i) grant any severance or termination pay, except
pursuant to agreements in effect on the date of this Agreement that
have been disclosed on Schedule 3.16, (ii) enter into any employment
agreement with any director, officer, or employee of the Company or
any Subsidiary, (iii) establish, adopt, enter into, or amend any
collective bargaining agreement or any bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance, or other
plan, agreement, trust, fund, policy, or arrangement for the benefit
of any current or former directors, officers, or employees of the
Company or any Subsidiary, and (iv) take any action with respect to
any Benefit Plan (including but not limited to the recognition of the
transaction contemplated by this Agreement as a change of control)
that will cause a discretionary acceleration or increase in the
vesting, exercisability, or benefits provided by any such Benefit
Plan;
(k) modify, amend, terminate or enter into any material
contract, agreement or commitment other than in the ordinary course of
business consistent with past practices;
(l) change its method of accounting as in effect at December
31, 1997 except as may be required by GAAP and as is concurred with by
the Company's independent auditors;
(m) make or change any election, change an annual accounting
period, file any amended Return, enter into any closing agreement,
settle any Tax claim or assessment relating to the Company or any
Subsidiary, surrender any right to claim a refund of Taxes, consent to
any extension or waiver of the limitation period applicable to any Tax
claim or assessment relating to the Company or any Subsidiary, take
any other action or omit to take any action, if any such election,
adoption, change, amendment, agreement, settlement, surrender,
consent, or other action or omission could have the effect of
materially increasing the Tax liability of the Company, any
Subsidiary, Acquiror, or any Affiliate of Acquiror;
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(n) alter in any material respect the customary practices
with respect to the credit and collection policies, procedures and
practices with respect to accounts receivable of the Company and the
Subsidiaries or the provision of discounts, rebates or allowances;
(o) dispose of or intentionally fail to keep in effect any
rights in, to or for the use of any Permit of the Company or any
Subsidiary which, individually or in the aggregate, would have a
Material Adverse Effect;
(p) pay, discharge, or satisfy any material 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 and
consistent with past practice of liabilities reflected or reserved
against in the financial statements of the Company or incurred in the
ordinary course of business and consistent with past practices;
(q) release or assign any material rights or claims, except
in the ordinary course of business in a manner consistent with past
practices;
(r) permit any insurance policy naming it as a beneficiary
or loss payee to be cancelled or terminated, except in the ordinary
course of business in a manner consistent with past practices; or
(s) enter into an agreement to do any of the actions
referred to in paragraphs (a) through (r) above.
Section 5.2 Other Proposals; Negotiations. Neither the Company, the
Subsidiaries, their respective Affiliates nor any of their respective officers,
directors, employees, lenders, investment banking firms, advisors or other
agents, or any Person acting on their behalf shall, directly or indirectly,
solicit or initiate or participate in any way in inquiries or proposals by, or
engage in any discussions or negotiations with, or furnish any information or
assistance to, or enter into any agreement with any Person or group of Persons
(other than Acquiror or its Affiliates) concerning any acquisition, merger,
consolidation, liquidation, dissolution, disposition or other transaction (or
series of transactions) involving the Company or any Subsidiary, if such merger,
consolidation, sale or other transaction would be inconsistent, in any respect,
with the transactions contemplated by this Agreement. The Company will promptly
notify Acquiror of the substance of any inquiry or proposal concerning any such
transaction that may be received by the Company, any Subsidiary, any of their
respective Affiliates, or any of their respective officers, directors,
employees, lenders, investment banking firms, advisors or other agents.
Section 5.3 Mutual Covenants. The parties mutually covenant from the
date of this Agreement to the Closing Date (and subject to the other terms of
this Agreement, including Section 5.6 hereof):
(a) to cooperate with each other in determining whether
filings are required to be made or consents required to be obtained in
any jurisdiction in connection with the consummation of the
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transactions contemplated by this Agreement and in making or causing
to be made any such filings promptly and in seeking to obtain timely
any such consents; and
(b) to use all reasonable efforts to obtain promptly the
satisfaction (but not waiver) of the conditions to the Closing of the
transactions contemplated herein (each party hereto shall furnish to
the other and to the other's counsel all such information as may be
reasonably required in order to effectuate the foregoing action).
Section 5.4 Disclosure Schedules. Prior to the Effective Time, the
Company will provide Acquiror with a supplement or amendment to the Company
Disclosure Schedules with respect to any matter, condition or occurrence arising
after the date of this Agreement which, if existing or occurring on the date of
this Agreement, would have been required to be set forth or described in the
Company Disclosure Schedules or would have been required to be disclosed as an
exception to a particular representation and warranty to make such
representation and warranty true and correct. No supplement or amendment of such
Company Disclosure Schedules provided to Acquiror after the date of this
Agreement shall be deemed to cure any breach of or alter any representation or
warranty made in this Agreement.
Section 5.5 Filings and Authorizations. The parties hereto will as
promptly as practicable, make or cause to be made all such filings and
submissions under laws, rules and regulations applicable to it or its Affiliates
as may be required (in the judgment of the Acquiror) to consummate the terms of
this Agreement, including all petitions and applications to be filed or supplied
pursuant to the HSR Act, the DGCL and the MGBCL and with (A) to the extent
required, the Missouri Public Service Commission (the "MPSC") pursuant to the
Missouri Public Service Commission Law (the "Missouri Utility Code"), (B) the
Illinois Commerce Commission (the "ILCC") pursuant to the Illinois Public
Utilities Act, (C) to the extent required, the Indiana Utility Regulatory
Commission (the "INURC") pursuant to the Indiana Public Service Commission Act
of 1941 (the "Indiana Utility Code") and (D) the New York Public Service
Commission (the "NYPSC") pursuant to the New York Public Service Law. Any such
filings and supplemental information will be in substantial compliance with the
requirements of the applicable law, rule or regulation. Each of Acquiror and the
Company shall furnish to the other such necessary information and reasonable
assistance as the other may request in connection with its preparation of any
filing or submission with the MPSC, ILCC, INURC and the NYPSC or which is
necessary under the HSR Act, the DGCL or MGBCL, and each of Acquiror and the
Company shall furnish to the other copies of any correspondence with or from any
Authority that relates to the transactions contemplated by this Agreement. The
Company and Acquiror shall keep each other apprised of the status of any
communications with, and inquiries or requests for additional information from,
any Authority, including the MPSC, ILCC, INURC, NYPSC, the United States Federal
Trade Commission ("FTC") and the Antitrust Division of the United States
Department of Justice (the "Antitrust Division"), and shall comply promptly with
any such inquiry or request. Each of Company and Acquiror will use its
reasonable efforts to obtain any clearance required under the HSR Act and from
the MPSC, ILCC, INURC, and NYPSC or any other Authority for the Merger and the
other transactions contemplated hereby. The Company and Acquiror will furnish
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all information required to be included in any application or other filing to be
made pursuant to the rules and regulations of any governmental or regulatory
authorities, domestic or foreign, in connection with the transactions
contemplated by this Agreement. Notwithstanding the foregoing, nothing contained
in this Agreement will require or obligate Acquiror (i) to initiate or defend
any litigation to which any governmental or regulatory authority, domestic and
foreign (including the MPSC, the ILCC, the INURC, the NYPSC, the Antitrust
Division of the Justice Department and the Federal Trade Commission) is a party,
(ii) to agree or otherwise become subject to any material limitations on (A) the
right of Acquiror or its Affiliates effectively to control or operate the
business, assets, or operations of the Company and the Subsidiaries, (B) the
right of Acquiror or its Affiliates to acquire or hold the business, assets, or
operations of the Company and the Subsidiaries, or (C) the right of Acquiror to
exercise full rights of ownership of the Company Common Shares acquired by
Acquiror (if any Company Common Shares are so acquired) including, without
limitation, the right to vote any Company Common Shares held by Acquiror on all
matters properly presented to the Company's stockholders, or (iii) to agree or
otherwise be required to sell or dispose of, hold separate (through the
establishment of a trust or otherwise), or divest itself of all or any portion
of the business, assets, or operations of the Company, any Subsidiary or
Acquiror or any of its Affiliates.
Section 5.6 Cooperation.
(a) Acquiror and the Company shall cooperate and shall cause
their Affiliates, officers, employees, agents and representatives to
cooperate to ensure the orderly transition of the businesses of the
Company and the Subsidiaries contemplated hereby and to minimize the
disruption to the Company's and each Subsidiary's business resulting
from the transactions contemplated hereby.
(b) The Company shall give Acquiror and its representatives
(including Acquiror's accountants, consultants, counsel and
employees), upon reasonable notice and during normal business hours,
reasonable access to the properties, contracts, employees, books,
records and affairs of the Company and the Subsidiaries, and shall
cause their officers, employees, agents and representatives to furnish
to Acquiror all documents, records and information (and copies
thereof) relating to the businesses of the Company and the
Subsidiaries, as Acquiror may reasonably request. Except as otherwise
provided in Section 9.15, no investigation or receipt of information
by Acquiror pursuant to, or in connection with, this Agreement, shall
diminish or obviate any of the representations, warranties, covenants
or agreements of the Company under this Agreement or the conditions to
the obligations of Acquiror under this Agreement. In the event this
Agreement is terminated pursuant to Section 8.1: (a) Acquiror shall
keep confidential any information obtained from the Company (except as
may be specifically (and only to the extent) required to be disclosed
by applicable law or administrative or legal process or pursuant to
any securities exchange rules), it being understood that Acquiror will
notify the Company in writing at least five business days (to the
extent possible) prior to any proposed disclosure of such confidential
information (subject to the immediately succeeding sentence) in order
to enable the Company to seek an appropriate protective order; and (b)
Acquiror shall use all reasonable efforts to return to the Company all
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documents (and reproductions thereof) supplied by the Company
containing information not within the exceptions described in the
immediately succeeding sentence, unless Acquiror provides assurances
reasonably satisfactory to the Company that such documents have been
destroyed. Notwithstanding anything to the contrary contained herein,
Acquiror shall not be required to keep confidential and may disclose
any information which (i) is or becomes publicly available other than
as a result of a disclosure by Acquiror in breach of this Agreement,
(ii) is or becomes available to Acquiror on a non-confidential basis,
or was within the possession of Acquiror and its Affiliates prior to
its being furnished to Acquiror, or (iii) was independently developed
without reference to any such information furnished by the Company to
Acquiror hereunder.
Section 5.7 State Takeover Statutes. The Company shall take all
reasonable steps, whether by action of the Company's Board of Directors,
stockholders or otherwise, to exempt the Company and the Merger from the
requirements, if applicable, of the takeover laws of the State of Missouri, and
any anti-takeover provisions contained in the Company's Certificate of
Incorporation or Bylaws.
Section 5.8 Delivery of Financial Statements and Reports. The Company
shall furnish to Acquiror within sixty (60) days after the close of each interim
quarterly accounting period occurring prior to the Merger, (i) consolidated and
consolidating balance sheets as at the end of each such quarterly period, the
related consolidated statements of income and retained earnings of the Company
and the Subsidiaries for the period then ended prepared on a quarterly basis,
and the related consolidated and consolidating statements of income and retained
earnings of the Company and the Subsidiaries for the period then ended prepared
on a fiscal year basis. The Company shall furnish to Acquiror within ninety (90)
days after the end of the Company's fiscal year, (i) consolidated and
consolidating balance sheets as at the end of such period and the related
consolidated and consolidating statements of income and retained earnings and
cash flows of the Company and the Subsidiaries for the period then ended
prepared on a fiscal year basis. In connection with any financial statements
delivered by the Company to Acquiror pursuant to this Section 5.8, the Company
shall deliver a certificate by the Company's president or principal financial
officer certifying that such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied by
the Company, except for any inconsistencies explained in such certificate. For
the Company's fiscal year-end, such financial statements shall have been audited
by PricewaterhouseCoopers LLP or another independent certified public accountant
selected by the Company and acceptable to Acquiror, and certified by such
accountants to have been prepared in accordance with generally accepted
accounting principles consistently applied by the Company.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Notification of Certain Matters. The Company will give
prompt notice to Acquiror and Acquiror will give prompt notice to the Company,
of (i) the occurrence, or non-occurrence, of any event the occurrence, or
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nonoccurrence, of which would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect,
(ii) any failure by the Company or Acquiror, as the case may be, to perform any
of the obligations required to be performed by them under this Agreement in any
material respect, and (iii) the occurrence, or non-occurrence, of any event the
occurrence, or nonoccurrence, of which would be likely to cause any condition to
the obligations of the Company or Acquiror not to be satisfied. The delivery of
any notice pursuant to this Section 6.1 will not limit or otherwise affect the
remedies available under this Agreement to the party receiving the notice. Each
party will give prompt notice to the other parties of any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by this
Agreement.
Section 6.2 Further Action. Upon the terms and subject to the
conditions of this Agreement, each of the parties will use all reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all other things necessary or advisable to consummate as promptly as
practicable the transactions contemplated by this Agreement; to obtain in a
timely manner all necessary waivers, consents, and approvals; to effect all
necessary registrations and filings; and otherwise to satisfy or cause to be
satisfied all conditions to its obligations under this Agreement.
Section 6.3 Public Announcements. No party hereto shall make or
issue, or cause to be made or issued, any public announcement or written
statement concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the other party, unless counsel to Acquiror
advises Acquiror that such announcement or statement may be required by law or
any listing agreement with, or rules of, the NYSE (in which case the parties
shall make reasonable efforts to consult with each other prior to such required
announcement).
Section 6.4 Affiliates. The Company has delivered to Acquiror a list
of names and addresses of those Persons who may at the time of the Company
stockholders' vote approving, or consenting to, as the case may be, the Merger,
have been "affiliates" of the Company within the meaning of Rule 145 ("Rule
145") (each such Person, together with each Person identified below, a "Rule 145
Affiliate") under the Securities Act. The Company will provide to Acquiror such
information and documents as Acquiror reasonably requests for purposes of
reviewing such list. Nothing in this Section 6.4 shall be deemed to be a
representation or warranty by the Company that the Rule 145 Affiliates are or
were affiliates within the meaning of Rule 145. The Company will add to such
list the names and addresses of any other Person (within the meaning of Rule
145) that Acquiror reasonably identifies (by written notice to the Company) as
being a Person who may be deemed to be a Rule 145 Affiliate of the Company. The
Company will use all reasonable efforts to deliver or cause to be delivered to
Acquiror, prior to the Effective Time, from each of the Rule 145 Affiliates of
the Company identified in the foregoing list (as the same may be supplemented as
aforesaid), a letter dated as of the Effective Time in form and substance
satisfactory to Acquiror to the effect that such Person acknowledges that such
Person may be an underwriter for the purposes of Rule 145 and agrees to certain
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restrictions on the disposition of Acquiror Common Stock to be issued to such
Person in the Merger.
Section 6.5 Preserving Qualification as Reorganization under Section
368 of the Code and Pooling of Interests Accounting Treatment. Neither the
Company nor Acquiror or their respective Affiliates will take, or agree to take,
any actions that would cause the Merger not to qualify as a "reorganization"
within the meaning of Section 368 of the Code or which would prevent or
adversely affect the ability of the Acquiror from accounting for the business
combination to be effected by the Merger as a pooling-of-interests transaction
under ▇▇▇ ▇▇. ▇▇.
Section 6.6 Additional Board Seats. As promptly as practicable after
the Effective Time, in accordance with and subject to the requirements of the
DGCL, the Certificate of Incorporation and Bylaws of Acquiror, the Board of
Directors of Acquiror will increase the size of the Acquiror Board of Directors
by adding two additional board seats, and will fill such vacancies by appointing
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Board of Directors of
Acquiror.
Section 6.7. Employee Matters.
(a) Prior to the Effective Time, the Company will amend the
National Enterprises Inc. and Continental Water Company Phantom Stock
Plans to provide (i) that all unvested awards under such plans will
vest upon the consummation of the Merger, (ii) that such awards shall
be payable immediately prior to consummation of the Merger, (iii) and
that such plan shall terminate following such payment.
(b) Following the Effective Time, the Surviving Corporation
shall, or shall cause the Subsidiaries to, maintain employee benefit
and welfare plans, programs, contracts, agreements, severance plans,
policies and executive perquisites, for the benefit of active and
retired employees of the Company and its Subsidiaries (excluding, for
purposes of this Section, employees covered by collective bargaining
agreements) which in the aggregate provide benefits that are
substantially equivalent to the benefits provided, to such active or
retired employees on the date hereof, or in the alternative, to
provide benefits that are at least equal, on an overall basis, to
those provided by Acquiror's Subsidiaries to their other employees of
comparable status and seniority.
Section 6.8. Tax Certificates. Immediately prior to the Closing Date,
the Company shall deliver to Acquiror certificates of officers of the Company,
which counsel may reasonably require in connection with their opinion under
Section 7.2(f), and Acquiror shall deliver to the Company certificates of
officers of the Acquiror which counsel may reasonably require in connection with
their opinion under Section 7.3(e).
Section 6.9. Due Diligence. The Company and Acquiror agree that from
the date hereof until February 17, 1999, Acquiror and its counsel, accountants
and other representatives shall have the right to conduct and complete a due
diligence investigation of the Company, its subsidiaries and their respective
businesses and the Company shall cooperate with such investigation. If the
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results of such due diligence investigation are not satisfactory to Acquiror, in
its sole and absolute discretion, Acquiror shall have the right to terminate
this Agreement on or prior to February 17, 1999 by written notice to the
Company. If Acquiror terminates this Agreement pursuant to this Section 6.9,
neither Acquiror nor the Company shall have any liability to the other arising
out of, or in connection with, this Agreement.
ARTICLE VII
CONDITIONS OF MERGER
Section 7.1 Conditions to Obligations of Each Party to Effect the
Merger. The obligations of each party to effect the Merger will be subject to
the satisfaction at or prior to the Effective Time of the following conditions:
(a) Regulatory Approval. Each of the MPSC, ILCC, INURC,
NYPSC (other than those in which Acquiror has chosen not to file for
approval) shall have issued an order approving the transactions
contemplated hereby, each such order shall not contain any
restrictions or conditions (other than those in effect on the date
hereof) which would have a Material Adverse Effect, and each such
order shall have become final and unappealable with no request for a
stay or motion for reconsideration or rehearing having been filed; and
all other statutory and regulatory consents, approvals and filings
which are required under the laws or regulations of the United States
and other Authorities shall have been obtained or made.
(b) HSR Act. Any waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated.
(c) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction, other order
shall have been issued by any court of competent jurisdiction, or
other legal restraint or prohibition preventing the consummation of
the transactions contemplated by this Agreement, nor shall there be
pending or overtly threatened any proceeding brought by any
administrative, governmental, or regulatory authority, domestic or
foreign, seeking such an order, injunction, or other restraint or
prohibition. No action shall have been taken, and no statute, rule,
regulation, or order shall have been entered, enforced, or deemed
applicable to the Merger, that prohibits the consummation of the
transactions contemplated by this Agreement.
Section 7.2 Additional Conditions to Obligations of Acquiror. The
obligations of Acquiror to effect the Merger are also subject to the following
conditions:
(a) Representations and Warranties. The representations and
warranties of the Company contained in this Agreement (which for
purposes of this Section 7.2(a) shall be read as though none of them
- 39 -
contained any materiality, Material Adverse Effect or correlative
terms or qualifiers) shall be true and correct in all respects, on and
as of the Effective Time with the same force and effect as if made on
and as of the Effective Time (other than those representations and
warranties that address matters only as of a particular date, as the
satisfaction of the foregoing condition with respect to such
representations and warranties will be determined as of that
particular date), except for transactions expressly permitted by the
terms of Section 5.1 of this Agreement and except where the failure of
the representations and warranties of the Company in the aggregate to
be true and correct in all respects would not have a Material Adverse
Effect; and Acquiror shall have received a certificate to that effect
signed by the President or Chief Financial Officer of the Company in
such officer's capacity as such and without personal liability
therefor.
(b) Agreements and Covenants. The Company shall have
performed or complied, in all material respects, with all of the
obligations under this Agreement to be performed or complied with by
it on or prior to the Effective Time; and Acquiror shall have received
a certificate to that effect signed by the President or Chief
Financial Officer of the Company.
(c) Consents Obtained. All material consents, waivers,
approvals or authorizations of third parties required to be obtained,
and all filings required to be made or notices required to be sent, by
the Company for the authorization, execution, and delivery of this
Agreement and the performance of the Company's obligations under this
Agreement shall have been obtained, made and sent by the Company.
(d) Opinion of the Company's Counsel. Acquiror shall have
received from ▇▇▇▇▇ ▇▇▇▇ LLP, or other counsel reasonably satisfactory
to Acquiror, an opinion dated as of the Effective Time in the form set
forth in Exhibit B hereto.
(e) Opinion of Company's Accountants. Acquiror shall have
received a letter, in form and substance reasonably satisfactory to
Acquiror, from PricewaterhouseCoopers LLP dated the Effective Time
stating that the business combination to be effected by the Merger
will qualify as a pooling-of-interests transaction under APB No. 16.
(f) Tax Opinion. Acquiror shall have received from Dechert
Price & ▇▇▇▇▇▇, an opinion dated as of the Effective Time stating that
the Merger will qualify as a "reorganization" under Section 368 of the
Code and that no gain or loss for federal income tax purposes will be
recognized by a stockholder of the Company upon the exchange of
Company Common Shares solely for Acquiror Common Stock; provided, that
such opinion may be based on assumptions, contain qualifications and
rely upon customary representations of officers of the Company and the
Acquiror appropriate to its subject matter.
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(g) Material Changes. There shall not have occurred any
change that as of the Effective Time would have a Material Adverse
Effect on the Company.
(h) Resignations of Certain Officers and Directors. The
Company shall have delivered to Acquiror resignations of those
officers and directors of the Company and the Subsidiaries set forth
on Schedule 7.2(h).
(i) Shareholders Agreements. All agreements among the
Company and any stockholder of the Company, including but not limited
to the Stock Restriction and Purchase Agreement dated November 15,
1985 and amended and renewed November 17, 1989, and the Agreement By
and Among the Directors of National Enterprises, Inc., shall have been
terminated.
Section 7.3 Additional Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is also subject to the following
conditions:
(a) Representations and Warranties. The representations and
warranties of Acquiror contained in this Agreement (which for purposes
of this Section 7.3(a) shall be read as though none of them contained
any materiality, Material Adverse Effect or correlative terms or
qualifiers) shall be true and correct in all respects, on and as of
the Effective Time with the same force and effect as if made on and as
of the Effective Time (other than those representations and warranties
that address matters only as of a particular date, as the satisfaction
of the foregoing condition with respect to such representations and
warranties will be determined as of that particular date), except
where the failure of the representations and warranties of the
Acquiror in the aggregate to be true and correct in all respects would
not have a Material Adverse Effect; and the Company shall have
received a certificate to that effect signed by the President or Chief
Financial Officer of Acquiror, in such officer's capacity as such and
without personal liability therefor.
(b) Agreements and Covenants. Acquiror shall have performed
or complied, in all material respects, with all of the obligations
under this Agreement to be performed or complied with by it on or
prior to the Effective Time; and the Company shall have received a
certificate to that effect signed by the President or Chief Financial
Officer of Acquiror.
(c) Opinion of Acquiror's Counsel. The Company shall have
received from Dechert Price & ▇▇▇▇▇▇, an opinion dated as of the
Effective Time in the form set forth in Exhibit C hereto.
(d) Opinion of Acquiror's Accountants. The Company shall
have received a letter, in form and substance reasonably satisfactory
to the Company, from PricewaterhouseCoopers LLP dated the Closing Date
stating that the business combination to be effected by the Merger
will qualify as a pooling-of-interests transaction under APB No. 16.
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(e) Tax Opinion. The Company shall have received from ▇▇▇▇▇
▇▇▇▇ LLP an opinion dated as of the Effective Time stating that the
Merger will qualify as a "reorganization" under Section 368 of the
Code and that no gain or loss for federal income tax purposes will be
recognized by a stockholder of the Company upon the exchange of
Company Common Shares solely for Acquiror Common Stock; provided, that
such opinion may be based on assumptions, contain qualifications and
rely upon customary representations of officers of the Company and the
Acquiror appropriate to its subject matter.
(f) Material Changes. There shall not have occurred any
change that as of the Effective Time would have a Material Adverse
Effect on the Acquiror.
(g) Registration Rights Agreement. Acquiror shall have
executed and delivered to the Company a registration rights agreement
in the form set forth in Exhibit D hereto.
ARTICLE VIII
TERMINATION, AMENDMENT, AND WAIVER
Section 8.1 Termination. This Agreement may be terminated, and the
Merger contemplated by this Agreement may be abandoned, at any time prior to the
Effective Time, notwithstanding the adoption of this Agreement and the approval
of the Merger by the stockholders of the Company:
(a) by mutual written consent duly authorized by the Board
of Directors of Acquiror and by the Board of Directors of the Company;
(b) by either Acquiror or the Company if the Merger has not
been consummated by July 30, 1999, except that the right to terminate
this Agreement under this Section 8.1(b) will not be available to any
party whose willful failure to perform any material obligation or to
fulfill any material condition under this Agreement has been the
proximate cause of, or resulted in, the failure of the Effective Time
to occur on or before that date;
(c) by either Acquiror or the Company if a court of
competent jurisdiction or an administrative, governmental, or
regulatory authority has issued a final non-appealable order, decree,
or ruling or taken any other action having the effect of permanently
restraining, enjoining or otherwise prohibiting the Merger;
(d) by the Company at any time (i) if the representations
and warranties of the Acquiror contained in this Agreement (which for
purposes of this Section 8.1(d) shall be read as though none of them
contained any materiality, Material Adverse Effect or correlative
terms or qualifiers) shall not be true and correct in all respects,
when made or at any time thereafter, such that the failure of the
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representations and warranties of the Acquiror in the aggregate to be
true and correct in all respects would have a Material Adverse Effect,
or (ii) if the Acquiror shall not have performed or complied, in all
material respects, with all of the obligations under this Agreement to
be performed or complied with by it (collectively, an "Acquiror
Breach"), and in each case of (i) and (ii) such Acquiror Breach shall
not reasonably be capable of being remedied or cured by the date set
forth in Section 8.1(b);
(e) by Acquiror at any time (i) if the representations and
warranties of the Company contained in this Agreement (which for
purposes of this Section 8.1(e) shall be read as though none of them
contained any materiality, Material Adverse Effect or correlative
terms or qualifiers) shall not be true and correct in all respects,
when made or at any time thereafter, such that the failure of the
representations and warranties of the Company in the aggregate to be
true and correct in all respects would have a Material Adverse Effect,
or (ii) if the Company shall not have performed or complied, in all
material respects, with all of the obligations under this Agreement to
be performed or complied with by it (collectively, a "Company
Breach"), and in each case of (i) and (ii) such Company Breach shall
not reasonably be capable of being remedied or cured by the date set
forth in Section 8.1(b); or
(f) by Acquiror on or before February 17, 1999 pursuant to
Section 6.9.
Section 8.2 Effect of Termination. In the event of the termination
of this Agreement pursuant to Section 8.1, this Agreement shall become void and
of no further force and effect, except for the provisions of this Article VIII,
Section 6.3 (relating to public announcements), Section 9.9 (relating to
governing law) and Section 9.13 (relating to jurisdiction) which shall not
terminate but shall continue. Following such termination, there shall be no
liability for any non-willful breach by either party of the terms and provisions
of this Agreement prior to such termination; provided, that nothing in this
Section 8.2 or Section 9.1 shall be deemed to release either party from any
liability for any willful breach by such party of the terms and provisions of
this Agreement prior to any such termination. Notwithstanding the foregoing, if
Acquiror terminates this Agreement pursuant to Section 6.9, neither Acquiror nor
the Company shall have any liability to the other arising out of, or in
connection with, this Agreement.
Section 8.3 Fees and Expenses. All fees and expenses incurred in
connection with this Agreement and the transactions contemplated by it will be
paid by the party incurring the fees and expenses, whether or not the Merger is
consummated. Notwithstanding anything to the contrary contained in this
Agreement, in the event of a dispute between the parties, the prevailing party
shall be entitled to receive from the non-prevailing party reimbursement for
legal fees and expenses incurred by the prevailing party in the pursuit or
defense of such dispute, as the case may be.
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ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Nature and Survival of Representations and Warranties.
The representations and warranties in this Agreement will terminate at the
Effective Time or upon the termination of this Agreement pursuant to Section
8.1, as the case may be.
Section 9.2 Construction. Acquiror and the Company have participated
jointly in the negotiation and drafting of this Agreement. In the event any
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by Acquiror and the Company, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local or foreign statute or law shall be deemed
also to refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. The word "including" in this Agreement shall mean
including without limitation. Words in the singular shall be held to include the
plural and vice versa and words of one gender shall be held to include the other
genders as the context requires. The terms "hereof," "herein," and "herewith"
and words of similar import shall, unless otherwise stated, be construed to
refer to this Agreement as a whole (including all of the Schedules and Exhibits
hereto) and not to any particular provision of this Agreement, and Article,
Section, paragraph, Exhibit and Schedule references are to the Articles,
Sections, paragraphs, Exhibits and Schedules to this Agreement unless otherwise
specified. The word "or" shall not be exclusive. Provisions of this Agreement
shall apply, when appropriate, to successive events and transactions. Section
references refer to this Agreement unless otherwise specified. It is understood
and agreed that neither the specification of any dollar amount in the
representations and warranties contained in this Agreement nor the inclusion of
any specific item in the Schedules or Exhibits is intended to imply that (1)
such matter is not in the ordinary course of business consistent with past
practice, or (2) such amounts or higher or lower amounts, or the items so
included or other items, are or are not material, and none of the parties shall
use the fact of the setting of such amounts or the fact of any inclusion of any
such item in the Schedules or Exhibits in any dispute or controversy between the
parties as to whether any obligation, item or matter is or is not in the
ordinary course of business or is or is not material for purposes hereof.
Section 9.3 Notices. All notices and other communications to be given
in connection with this Agreement must be in writing and will be deemed to have
been given at the time of delivery if delivered personally; at the time of
transmission if transmitted by facsimile (with confirmation of receipt); on the
day after being sent if sent by overnight courier (with courier's fee prepaid);
or three business days after being mailed if sent by registered or certified
mail (postage prepaid, return receipt requested), in each case to the parties at
the following addresses:
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(a) If to Acquiror:
American Water Works Company, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: J. ▇▇▇▇▇ ▇▇▇▇
President and Chief Executive Officer
With copies to:
American Water Works Company, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: W. ▇▇▇▇▇▇▇ ▇▇▇▇, Esquire
Secretary and General Counsel
and
Dechert Price & ▇▇▇▇▇▇
4000 ▇▇▇▇ Atlantic Tower
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
(b) If to the Company:
National Enterprises Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
With a copy to:
▇▇▇▇▇ ▇▇▇▇ LLP
One ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
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Section 9.4 Exhibits and Schedules. All Exhibits and Schedules
annexed hereto or referred to herein are hereby incorporated in and made a part
of this Agreement as if set forth in full herein. References to schedules in
this Agreement are references to the Schedules.
Section 9.5 Severability. If any provision of this Agreement is
invalid, illegal, or incapable of being enforced by any rule of law or public
policy, all other provisions of this Agreement will nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated by this Agreement is not affected in any manner adverse to any
party. Upon a determination that any term or other provision is invalid,
illegal, or incapable of being enforced, the parties will negotiate in good
faith to modify this Agreement in order to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated by this Agreement are carried out to the extent
possible.
Section 9.6 Entire Agreement; Beneficiaries. This Agreement together
with the Schedules and Exhibits hereto constitutes the entire understanding of
the parties with respect to the subject matter hereof, and supersedes all prior
agreements or understandings, both written and oral, between the parties.
Nothing herein expressed or implied is intended or should be construed to confer
upon or give to any Person other than the parties hereto and their successors
and assigns any rights or remedies under or by reason of this Agreement.
Section 9.7 Assignment. This Agreement may not be assigned by
operation of law or otherwise without the consent of all of the parties.
Section 9.8 Parties in Interest. This Agreement will be binding upon
and inure solely to the benefit of each of the parties, and nothing in this
Agreement, express or implied, is intended to or will confer upon any other
Person any right, benefit or remedy.
Section 9.9 Governing Law. This Agreement will be governed by, and
interpreted in accordance with the laws of the State of New York, without giving
effect to the conflicts of laws principles thereof.
Section 9.10 Counterparts. This Agreement may be executed in one or
more counterparts, and by different parties in separate counterparts, each of
which when executed will be deemed to be an original but all of which taken
together will constitute one and the same agreement.
Section 9.11 Remedies for Breach. The parties acknowledge that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed by them in accordance with their specific terms or
were otherwise breached. Each of the parties agrees that the other parties will
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity. Notwithstanding the foregoing, neither of the parties shall be entitled
- 46 -
to any monetary damages or compensation of any kind arising from any non-willful
breach by the other party of the terms and provisions of this Agreement.
Section 9.12 Commencement of Suits, Actions, Etc. The Company agrees
that any suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby commenced by the Company against the Acquiror
(other than a counterclaim or similar responsive claim) shall be commenced in
the United States District Court for the State of New Jersey, or to the extent
such court would not have jurisdiction over such action, in the Superior Court
of New Jersey, Camden County Division (and agrees not to commence any action,
suit or proceeding relating hereto except in such courts). The Acquiror agrees
that any suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby commenced by the Acquiror against the Company
(other than a counterclaim or similar responsive claim) shall be commenced in
the United States District Court for the Eastern District of Missouri, or to the
extent such court does not have jurisdiction over such action, in the Circuit
Court of St. Louis County in Missouri (and agrees not to commence any action,
suit or proceeding relating hereto except in such courts).
Section 9.13 Amendment; Waiver. The parties may, by mutual agreement,
amend this Agreement in any respect, and any party, as to such party, may (i)
extend the time for the performance of any of the obligations of the other
party; (ii) waive any inaccuracies in representations and warranties by the
other party; (iii) waive compliance by the other party with any of the covenants
or agreements contained herein and performance of any obligations by the other
party; and (iv) waive the fulfillment of any condition that is precedent to the
performance by such party of any of its obligations under this Agreement. To be
effective, any such amendment or waiver must be in writing and be signed by the
party providing such waiver or extension, as the case may be. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies which any party may otherwise have at law or in equity. The waiver by
any party hereto of any breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach, whether or not
similar. Notwithstanding anything to the contrary in this Section 9.13 or in
Section 8.1(b), in the event that Acquiror has filed a petition or application
with (a) the MPSC pursuant to the Missouri Utility Code or (b) the INURC
pursuant to the Indiana Utility Code and the condition set forth in Section
7.1(a) with respect to either the MPSC or the NYPSC has not been satisfied by
July 26, 1999, either Acquiror or the Company may by giving written notice to
the other party on or prior to July 30, 1999, unilaterally extend the date
specified in Section 8.1(b) to "September 30, 1999."
Section 9.14 Captions. The Article, Section, and paragraph captions
herein are for convenience of reference only, do not constitute part of this
Agreement, and will not be deemed to limit or otherwise affect any of the
provisions hereof.
Section 9.15 Additional Disclosures. For purposes of this Agreement,
the Company shall not be deemed to breach any representation and warranty
contained in this Agreement or be deemed to have failed to satisfy the condition
- 47 -
set forth in Section 7.2(g) of this Agreement to the extent that the matter
giving rise to the breach or non-satisfaction of condition was
(a) fairly disclosed in,
(b) apparent on its face from, or
(c) reasonably foreseeable from,
the disclosure made in or by (i) agreements, documents or certificates expressly
required to be delivered by the Company to Acquiror under the terms of this
Agreement and that were actually delivered to Acquiror prior to the date hereof;
(ii) written letters and memoranda describing issues to be disclosed and
addressed to J. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or W. ▇▇▇▇▇▇▇ ▇▇▇▇, on the one hand,
by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
on the other hand, and actually delivered prior to the date hereof; or (iii) the
schedules to this Agreement and the agreements and documents expressly listed
thereon and provided to Acquiror. Notwithstanding the foregoing,
(y) the consequences of any failure of the ▇▇▇▇▇▇ Park
Intake Tunnel (other than the cost of replacing it) or
(z) any circumstances resulting in an injury to a Person
shall be deemed not to be disclosed or reasonably foreseeable from any
disclosures.
IN WITNESS WHEREOF, Acquiror and the Company have caused this
Agreement to be executed as of the date first written above.
AMERICAN WATER WORKS COMPANY, INC.
By:_________________________________
J. ▇▇▇▇▇ ▇▇▇▇
President and Chief Executive Officer
NATIONAL ENTERPRISES INC.
By:_____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
- 48 -